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Tuesday, 01 October 13
DRY BULK MARKET POISED FOR RETREAT ON CHINA HOLIDAY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The start of a national weeklong in China as of Tuesday is expected to put a lid in the latest rally of the dry bulk freight market, as has always been the case in similar occasions. This trend has already been obvious, by tracking the latest couple of sessions of the industry's benchmark, the Baltic Dry Index. The BDI was down 43 points yesterday, to end at 2,003 points, still more than double than the level of this past summer. The Capesize market witnessed the widest losses, which again was to be expected, given that most of the Capesize business is coming out of China. The BCI (Baltic Capesize Index) was down by 114 points to 3,853. Marginal losses were again obvious in the Panamax market, while smaller ship classes fared better, with Supramaxes rising by 10 points and Handysizes by three points to 1,079 and 597 respectively.
Capt. Jitesh Jaipuriyar, Chief Operating officer with Emerald Maritime, Dubai, offered Hellenic Shipping News Worldwide (www.hellenicshippingnews.com) an insight, regarding this latest rally of the dry bulk market, which has been fuelled by factors both "upstream" and "downstream". In the upstream factors, Capt. Jaipuriyar, noted that "miners are not able to sell at higher costs as there are few “takers”. India and China, as one of the most prospective import economies, are unable to support high raw material prices due to currency devaluation and slow growth combined. However, a miner may not be able to feed supply at the same cost for long as it threatens the very survival. Thus, the importer is forced to pay for high raw material prices which eventually is directly correlated to BDI upswing and supports the rally", he stated.
Regarding downstream factors, Capt. said that "in the current scenario, any increase in prices of raw materials, shall force miners to pass on the rises to the end users, in order to maintain profit margins, especially if this trend continues for an extended period. For shipping to recover, then this period has to be extended. Does it mean that it would bring “Inflationary pressure” in emerging economies? Not necessary. This is because when pressure builds up on downstream, other “balancing factors” shall come into play" he says.
According to Capt. Jaipuriyar, at this stage "the following question arises, if the high raw materials cost shall be able to create a “derived demand” or not. What we see as of now may not be real derived demand but more of a “Pseudo Demand”. Pseudo demand emerges from the constraint of choices a company has when having contracted out spot rates. This will show increased demand through paying more for shipping of the materials. However, the fact remains that companies have to commit to long term contracts (LTCs) and soaring period rates would not allow them to contract ships at lesser Time-Charter equivalents. But LTCs can play ‘Wait and watch’ game. This again contributes to pool of “pseudo demand” to be capitalized later and would support the rally", he says.
BULLWHIP EFFECT & “DECOUPLING”
"Last month, A Capesize stem from Australia to China, cost USD 14 per MT whereas same when slit in two panamaxes, costs only USD 13 per MT. This is against the economy of scale. So, how does it happen? When the demand goes up, a producer goes for bigger volumes and Capes rate go high. Due to limited Capes, the demand for smaller sizes down the chain increases which in effect creates a ‘Bullwhip effect’ to drive the demand for ships and rallies BDI overall.
So, at some point of time, the economic principles “decouple” with existing demand and supply scenario and lead to speculations. This in turn brings in volatility in the market. But the end demand drives it in sustainable way in spite of creation of multiple peaks and troughs on the way.
ROAD AHEAD
There have been many attempts to forecast BDIs in past and will continued to be explored. However, interestingly, it appears that the accuracy of forecasts lies not in “correlation” but possible “negative correlations”. It is for the fact that a positive correlation is not mere a result of one factor but a combination of many. Under such circumstances, it may not be possible to substantiate a proper or perfect “weightage” to one factor or another. But, past shows that gold, CRB (Commodity research bureau index) and crude prices often indicate how the negative correlation is building up and may help forecast BDI for short runs, possibly.
Overall, market remains upbeat for positive growth as stockpiles of grains and coal and other major commodities remain high to be shipped across the geographies", he concluded.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Sunday, 13 October 13
API 8 CFR SOUTH CHINA COAL - AVERAGE Q4 2013 DELIVERY FELL 0.30 PERCEPT ON WEEK
COALspot.com : API 8 CFR South China Coal swaps for average Q4 2013 delivery fell 0.30 percept week on week on Friday 11 October 2013. The CFR South ...
Saturday, 12 October 13
PANAMAX: OWNERS ARE AT US$ 17-18.5K PER DAY; CHARTERERS ARE AT US$ 15.5-16K - CAPT. REDDY
COALspot.com - The futures market was heavily down on the cape size vessels and the physical average charterer rates on cape size vessels dropped by ...
Friday, 11 October 13
DRY BULK FREIGHT RATE POSITIVE MOMENTUM TO BE SUPPORTED BY HIGHER DEMAND SAYS BIMCO - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
BIMCO released its latest short term research on the shipping markets, estimating that the elevated level of Capesize TC average rates i ...
Friday, 11 October 13
US COAL PRODUCTION FALLS 7.70% IN SEPTEMBER
COALspot.com – United States the world’s second largest coal producer produced approximately 17.70 million short tons (mmst) of coal in ...
Thursday, 10 October 13
NPC AUSTRALIA SHIPPED 2.99 MILLION TONS OF COAL W-O-W
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 12.04 per cent week on week to 2.99 million mt for ...
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- Kapuas Tunggal Persada - Indonesia
- Aboitiz Power Corporation - Philippines
- Eastern Coal Council - USA
- European Bulk Services B.V. - Netherlands
- Billiton Holdings Pty Ltd - Australia
- IHS Mccloskey Coal Group - USA
- Sarangani Energy Corporation, Philippines
- Gujarat Sidhee Cement - India
- Chettinad Cement Corporation Ltd - India
- Mintek Dendrill Indonesia
- Essar Steel Hazira Ltd - India
- Deloitte Consulting - India
- Borneo Indobara - Indonesia
- Uttam Galva Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Mercuria Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Thai Mozambique Logistica
- Orica Australia Pty. Ltd.
- Mercator Lines Limited - India
- Indogreen Group - Indonesia
- Merrill Lynch Commodities Europe
- Bangladesh Power Developement Board
- Latin American Coal - Colombia
- Singapore Mercantile Exchange
- Samtan Co., Ltd - South Korea
- Baramulti Group, Indonesia
- Tata Chemicals Ltd - India
- The University of Queensland
- Commonwealth Bank - Australia
- PNOC Exploration Corporation - Philippines
- Oldendorff Carriers - Singapore
- Maheswari Brothers Coal Limited - India
- Vizag Seaport Private Limited - India
- Power Finance Corporation Ltd., India
- Kaltim Prima Coal - Indonesia
- Cement Manufacturers Association - India
- Central Java Power - Indonesia
- Coastal Gujarat Power Limited - India
- Africa Commodities Group - South Africa
- Port Waratah Coal Services - Australia
- PTC India Limited - India
- Independent Power Producers Association of India
- Banpu Public Company Limited - Thailand
- Trasteel International SA, Italy
- Bhushan Steel Limited - India
- Siam City Cement PLC, Thailand
- Kumho Petrochemical, South Korea
- Attock Cement Pakistan Limited
- Bharathi Cement Corporation - India
- Miang Besar Coal Terminal - Indonesia
- MS Steel International - UAE
- Grasim Industreis Ltd - India
- Coalindo Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Heidelberg Cement - Germany
- Parry Sugars Refinery, India
- Malabar Cements Ltd - India
- Altura Mining Limited, Indonesia
- Timah Investasi Mineral - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Ambuja Cements Ltd - India
- IEA Clean Coal Centre - UK
- Sical Logistics Limited - India
- Sakthi Sugars Limited - India
- Chamber of Mines of South Africa
- Indo Tambangraya Megah - Indonesia
- Coal and Oil Company - UAE
- TeaM Sual Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Goldman Sachs - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement - Thailand
- South Luzon Thermal Energy Corporation
- Parliament of New Zealand
- Bukit Baiduri Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Makarim & Taira - Indonesia
- Central Electricity Authority - India
- ICICI Bank Limited - India
- CNBM International Corporation - China
- The State Trading Corporation of India Ltd
- Alfred C Toepfer International GmbH - Germany
- Cigading International Bulk Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Straits Asia Resources Limited - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Agrawal Coal Company - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Posco Energy - South Korea
- Indian Energy Exchange, India
- Jorong Barutama Greston.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Metalloyd Limited - United Kingdom
- Electricity Generating Authority of Thailand
- Vedanta Resources Plc - India
- Vijayanagar Sugar Pvt Ltd - India
- Larsen & Toubro Limited - India
- Minerals Council of Australia
- Pendopo Energi Batubara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Directorate General of MIneral and Coal - Indonesia
- Xindia Steels Limited - India
- Standard Chartered Bank - UAE
- GN Power Mariveles Coal Plant, Philippines
- Toyota Tsusho Corporation, Japan
- Medco Energi Mining Internasional
- VISA Power Limited - India
- Salva Resources Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- OPG Power Generation Pvt Ltd - India
- ASAPP Information Group - India
- Savvy Resources Ltd - HongKong
- Riau Bara Harum - Indonesia
- Simpson Spence & Young - Indonesia
- AsiaOL BioFuels Corp., Philippines
- The Treasury - Australian Government
- Star Paper Mills Limited - India
- International Coal Ventures Pvt Ltd - India
- New Zealand Coal & Carbon
- Price Waterhouse Coopers - Russia
- GVK Power & Infra Limited - India
- Tamil Nadu electricity Board
- Petron Corporation, Philippines
- India Bulls Power Limited - India
- Marubeni Corporation - India
- Petrochimia International Co. Ltd.- Taiwan
- Sindya Power Generating Company Private Ltd
- CIMB Investment Bank - Malaysia
- San Jose City I Power Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Lanco Infratech Ltd - India
- Gujarat Electricity Regulatory Commission - India
- GMR Energy Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Kalimantan Lumbung Energi - Indonesia
- Eastern Energy - Thailand
- Wilmar Investment Holdings
- London Commodity Brokers - England
- Iligan Light & Power Inc, Philippines
- Australian Coal Association
- Maharashtra Electricity Regulatory Commission - India
- Madhucon Powers Ltd - India
- White Energy Company Limited
- Kartika Selabumi Mining - Indonesia
- SMC Global Power, Philippines
- Bukit Makmur.PT - Indonesia
- Bhoruka Overseas - Indonesia
- Energy Development Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Bhatia International Limited - India
- Intertek Mineral Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Antam Resourcindo - Indonesia
- Ministry of Transport, Egypt
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMG Consultants - Indonesia
- Formosa Plastics Group - Taiwan
- Rashtriya Ispat Nigam Limited - India
- Barasentosa Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Videocon Industries ltd - India
- Ind-Barath Power Infra Limited - India
- Economic Council, Georgia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Mining Services - Indonesia
- Georgia Ports Authority, United States
- GAC Shipping (India) Pvt Ltd
- Indika Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Directorate Of Revenue Intelligence - India
- Bahari Cakrawala Sebuku - Indonesia
- Indonesian Coal Mining Association
- Meenaskhi Energy Private Limited - India
- Carbofer General Trading SA - India
- Dalmia Cement Bharat India
- Electricity Authority, New Zealand
- Global Green Power PLC Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Globalindo Alam Lestari - Indonesia
- Interocean Group of Companies - India
- Ministry of Mines - Canada
- McConnell Dowell - Australia
- Energy Link Ltd, New Zealand
- Aditya Birla Group - India
- Manunggal Multi Energi - Indonesia
- Thiess Contractors Indonesia
- PowerSource Philippines DevCo
- Renaissance Capital - South Africa
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Indian Oil Corporation Limited
- Australian Commodity Traders Exchange
- Mjunction Services Limited - India
- Sojitz Corporation - Japan
- Rio Tinto Coal - Australia
- Global Business Power Corporation, Philippines
- Edison Trading Spa - Italy
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Planning Commission, India
- Wood Mackenzie - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jindal Steel & Power Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Romanian Commodities Exchange
- Ministry of Finance - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Meralco Power Generation, Philippines
- Anglo American - United Kingdom
- Therma Luzon, Inc, Philippines
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