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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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Thursday, 10 October 13
SEVERAL PANAMAX FIXTURES FOR 1 YEAR TC HAVE BEEN REPORTED AROUND $13.5K/DAY - FEARNRESEARCH
Handy
The market is not much fancy as several holidays in the Far East last week. Tonnage side seems tight in SE Asia but there are many of them in ...
Wednesday, 09 October 13
PANAMAX: FIRM ; FIXING ACTIVITY INCREASED IN BOTH BASINS - INTERMODAL
This was another week of gains for the Dry Bulk market, albeit very modest ones compared to the previous ones. Charterers and owners struggled for t ...
Tuesday, 08 October 13
CHINA: INTENSE COMPETITION AMONG DOMESTIC COAL MINERS AS 2013 IMPORT DEMAND REMAINS STRONG - WOOD MACKENZIE
Prices will not fall under RMB500/t or risk supply availability to the coastal market
Despite China's lower economic growth, Wood Mackenzie says ...
Monday, 07 October 13
RICHARD BAY COAL TERMINAL SHIPPED 49.94 MMT OF COAL YTD
COALspot.com - Richards Bay Coal Terminal (RBCT), the world's single largest coal terminal has shipped 49,946,509 mt of coals YTD, according to por ...
Monday, 07 October 13
SOUTH AFRICA'S RBCT SHIPPED 7.94% MORE COAL IN SEPT' 13
COALspot.com - Richards Bay Coal Terminal (RBCT), the single largest coal export terminal in South Africa as well as in the world has shipped 7.94 p ...
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- Indian Oil Corporation Limited
- Aboitiz Power Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Bhatia International Limited - India
- Tamil Nadu electricity Board
- PetroVietnam Power Coal Import and Supply Company
- Standard Chartered Bank - UAE
- GVK Power & Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Ministry of Transport, Egypt
- Gujarat Sidhee Cement - India
- Bangladesh Power Developement Board
- Parliament of New Zealand
- McConnell Dowell - Australia
- MS Steel International - UAE
- Jindal Steel & Power Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Global Business Power Corporation, Philippines
- Electricity Authority, New Zealand
- Manunggal Multi Energi - Indonesia
- Xindia Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Coalindo Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Sinarmas Energy and Mining - Indonesia
- Bhoruka Overseas - Indonesia
- Salva Resources Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Thai Mozambique Logistica
- Baramulti Group, Indonesia
- Commonwealth Bank - Australia
- Maharashtra Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kumho Petrochemical, South Korea
- Iligan Light & Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Indogreen Group - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Bulk Trading Sa - Switzerland
- Uttam Galva Steels Limited - India
- Indonesian Coal Mining Association
- Kapuas Tunggal Persada - Indonesia
- Petron Corporation, Philippines
- IEA Clean Coal Centre - UK
- ICICI Bank Limited - India
- Port Waratah Coal Services - Australia
- Larsen & Toubro Limited - India
- Deloitte Consulting - India
- Wood Mackenzie - Singapore
- White Energy Company Limited
- Energy Link Ltd, New Zealand
- ASAPP Information Group - India
- Mintek Dendrill Indonesia
- Videocon Industries ltd - India
- San Jose City I Power Corp, Philippines
- Chamber of Mines of South Africa
- SN Aboitiz Power Inc, Philippines
- Latin American Coal - Colombia
- Global Green Power PLC Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Therma Luzon, Inc, Philippines
- Toyota Tsusho Corporation, Japan
- The University of Queensland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Intertek Mineral Services - Indonesia
- Sical Logistics Limited - India
- Sindya Power Generating Company Private Ltd
- Vizag Seaport Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Mercuria Energy - Indonesia
- CNBM International Corporation - China
- Simpson Spence & Young - Indonesia
- Medco Energi Mining Internasional
- Lanco Infratech Ltd - India
- Wilmar Investment Holdings
- Cigading International Bulk Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Singapore Mercantile Exchange
- London Commodity Brokers - England
- Eastern Energy - Thailand
- Attock Cement Pakistan Limited
- Borneo Indobara - Indonesia
- PNOC Exploration Corporation - Philippines
- Grasim Industreis Ltd - India
- Kideco Jaya Agung - Indonesia
- Sakthi Sugars Limited - India
- Meralco Power Generation, Philippines
- Bhushan Steel Limited - India
- Cement Manufacturers Association - India
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Finance - Indonesia
- Metalloyd Limited - United Kingdom
- Aditya Birla Group - India
- Energy Development Corp, Philippines
- Anglo American - United Kingdom
- GMR Energy Limited - India
- Rio Tinto Coal - Australia
- Leighton Contractors Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Pendopo Energi Batubara - Indonesia
- TeaM Sual Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Star Paper Mills Limited - India
- Indian Energy Exchange, India
- The Treasury - Australian Government
- Indika Energy - Indonesia
- Makarim & Taira - Indonesia
- Electricity Generating Authority of Thailand
- Parry Sugars Refinery, India
- Vedanta Resources Plc - India
- Neyveli Lignite Corporation Ltd, - India
- OPG Power Generation Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- European Bulk Services B.V. - Netherlands
- Directorate Of Revenue Intelligence - India
- Vijayanagar Sugar Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Trasteel International SA, Italy
- Bukit Baiduri Energy - Indonesia
- Madhucon Powers Ltd - India
- Coal and Oil Company - UAE
- Meenaskhi Energy Private Limited - India
- Kaltim Prima Coal - Indonesia
- PTC India Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- VISA Power Limited - India
- Australian Commodity Traders Exchange
- Antam Resourcindo - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Heidelberg Cement - Germany
- CIMB Investment Bank - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Independent Power Producers Association of India
- Bayan Resources Tbk. - Indonesia
- Romanian Commodities Exchange
- Krishnapatnam Port Company Ltd. - India
- Marubeni Corporation - India
- Merrill Lynch Commodities Europe
- Ambuja Cements Ltd - India
- Eastern Coal Council - USA
- Mercator Lines Limited - India
- Sarangani Energy Corporation, Philippines
- The State Trading Corporation of India Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Banpu Public Company Limited - Thailand
- Central Electricity Authority - India
- Orica Mining Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Chettinad Cement Corporation Ltd - India
- Siam City Cement PLC, Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Goldman Sachs - Singapore
- Barasentosa Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- Siam City Cement - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Posco Energy - South Korea
- Indo Tambangraya Megah - Indonesia
- Ceylon Electricity Board - Sri Lanka
- SMG Consultants - Indonesia
- Georgia Ports Authority, United States
- Renaissance Capital - South Africa
- Kobexindo Tractors - Indoneisa
- Planning Commission, India
- Alfred C Toepfer International GmbH - Germany
- Mjunction Services Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Power Finance Corporation Ltd., India
- Interocean Group of Companies - India
- PowerSource Philippines DevCo
- Central Java Power - Indonesia
- Malabar Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Minerals Council of Australia
- Agrawal Coal Company - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Africa Commodities Group - South Africa
- Price Waterhouse Coopers - Russia
- Gujarat Mineral Development Corp Ltd - India
- Samtan Co., Ltd - South Korea
- Semirara Mining Corp, Philippines
- Sojitz Corporation - Japan
- India Bulls Power Limited - India
- Orica Australia Pty. Ltd.
- IHS Mccloskey Coal Group - USA
- GAC Shipping (India) Pvt Ltd
- Formosa Plastics Group - Taiwan
- New Zealand Coal & Carbon
- Ind-Barath Power Infra Limited - India
- Altura Mining Limited, Indonesia
- Australian Coal Association
- Jaiprakash Power Ventures ltd
- Economic Council, Georgia
- Bahari Cakrawala Sebuku - Indonesia
- Thiess Contractors Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Edison Trading Spa - Italy
- Kalimantan Lumbung Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Dalmia Cement Bharat India
- Oldendorff Carriers - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMC Global Power, Philippines
- Savvy Resources Ltd - HongKong
- Carbofer General Trading SA - India
- Billiton Holdings Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Bharathi Cement Corporation - India
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