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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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Monday, 07 October 13
SGX - CFR SOUTH CHINA COAL SWAPS END ALMOST FLAT
COALspot.com : SGX has launched API 8 CFR South China Coal Swap on 29 April 2013 and SGX replaced the previous swap.
API 8 CFR South China Coal s ...
Monday, 07 October 13
Q3'14 SUB-BIT FOB INDONESIA COAL SWAP CLOSED 6.53% HIGHER THAN Q4'13
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q4 2013 delivery gained 0.53 % on day and fell 2.33 percept month on month ...
Sunday, 06 October 13
DRY BULK FREIGHT MARKET STAYS STEADY IN SPITE CHINESE HOLIDAYS - SOLYM CARRIERS SINGAPORE
COALspot.com: The freight market continued to remain firm in spite of Chinese holidays.
The BDI closed at 2,084 points on Friday 4 October or up ...
Saturday, 05 October 13
CAPESIZE EARNINGS SKYROCKET AS A RESULT OF INCREASED CHINA DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
An increased iron ore demand has triggered this latest dry bulk rally, which could get yet another boost during next week, when China is expected to ...
Friday, 04 October 13
NICKEL ORE SHIPMENTS - LESSONS LEARNED FROM LOSSES
One of the most pressing problems for the bulk shipping industry is the safe carriage of nickel ore. The increasing demand for this commodity is fue ...
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- Ind-Barath Power Infra Limited - India
- Indian Oil Corporation Limited
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- Ministry of Transport, Egypt
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- Eastern Coal Council - USA
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- Goldman Sachs - Singapore
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- Mintek Dendrill Indonesia
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- Merrill Lynch Commodities Europe
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- Lanco Infratech Ltd - India
- Bayan Resources Tbk. - Indonesia
- MS Steel International - UAE
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- Vijayanagar Sugar Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Sojitz Corporation - Japan
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- Kaltim Prima Coal - Indonesia
- PTC India Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
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- Global Coal Blending Company Limited - Australia
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- Latin American Coal - Colombia
- Bhatia International Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Jaiprakash Power Ventures ltd
- Chettinad Cement Corporation Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- White Energy Company Limited
- Medco Energi Mining Internasional
- Orica Mining Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Chamber of Mines of South Africa
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
- PowerSource Philippines DevCo
- Madhucon Powers Ltd - India
- Deloitte Consulting - India
- Indika Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Pendopo Energi Batubara - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bhushan Steel Limited - India
- The University of Queensland
- ICICI Bank Limited - India
- London Commodity Brokers - England
- McConnell Dowell - Australia
- Aditya Birla Group - India
- Miang Besar Coal Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMG Consultants - Indonesia
- VISA Power Limited - India
- Uttam Galva Steels Limited - India
- Coastal Gujarat Power Limited - India
- Africa Commodities Group - South Africa
- Coalindo Energy - Indonesia
- Videocon Industries ltd - India
- Carbofer General Trading SA - India
- Borneo Indobara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Salva Resources Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Port Waratah Coal Services - Australia
- Singapore Mercantile Exchange
- PNOC Exploration Corporation - Philippines
- Renaissance Capital - South Africa
- Global Green Power PLC Corporation, Philippines
- Antam Resourcindo - Indonesia
- Energy Link Ltd, New Zealand
- GAC Shipping (India) Pvt Ltd
- Australian Commodity Traders Exchange
- Bahari Cakrawala Sebuku - Indonesia
- TeaM Sual Corporation - Philippines
- Rio Tinto Coal - Australia
- Parliament of New Zealand
- Manunggal Multi Energi - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wood Mackenzie - Singapore
- Petron Corporation, Philippines
- Marubeni Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Authority, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- LBH Netherlands Bv - Netherlands
- Altura Mining Limited, Indonesia
- India Bulls Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Heidelberg Cement - Germany
- Holcim Trading Pte Ltd - Singapore
- OPG Power Generation Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- ASAPP Information Group - India
- Planning Commission, India
- Therma Luzon, Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Mines - Canada
- Sarangani Energy Corporation, Philippines
- Indonesian Coal Mining Association
- Georgia Ports Authority, United States
- Star Paper Mills Limited - India
- The Treasury - Australian Government
- Karaikal Port Pvt Ltd - India
- Ambuja Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- Kumho Petrochemical, South Korea
- Commonwealth Bank - Australia
- Romanian Commodities Exchange
- Makarim & Taira - Indonesia
- Straits Asia Resources Limited - Singapore
- Electricity Generating Authority of Thailand
- CIMB Investment Bank - Malaysia
- The State Trading Corporation of India Ltd
- Cigading International Bulk Terminal - Indonesia
- Sakthi Sugars Limited - India
- Interocean Group of Companies - India
- Kalimantan Lumbung Energi - Indonesia
- Wilmar Investment Holdings
- Cement Manufacturers Association - India
- Sinarmas Energy and Mining - Indonesia
- Orica Australia Pty. Ltd.
- Oldendorff Carriers - Singapore
- Siam City Cement - Thailand
- Tata Chemicals Ltd - India
- Semirara Mining Corp, Philippines
- CNBM International Corporation - China
- Eastern Energy - Thailand
- Australian Coal Association
- Thai Mozambique Logistica
- Economic Council, Georgia
- Mercuria Energy - Indonesia
- Edison Trading Spa - Italy
- Intertek Mineral Services - Indonesia
- Bharathi Cement Corporation - India
- Gujarat Electricity Regulatory Commission - India
- Coal and Oil Company - UAE
- Leighton Contractors Pty Ltd - Australia
- Billiton Holdings Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Sical Logistics Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Posco Energy - South Korea
- Standard Chartered Bank - UAE
- Siam City Cement PLC, Thailand
- Barasentosa Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Asmin Koalindo Tuhup - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Indian Energy Exchange, India
- Meenaskhi Energy Private Limited - India
- Dalmia Cement Bharat India
- Baramulti Group, Indonesia
- Metalloyd Limited - United Kingdom
- Energy Development Corp, Philippines
- Gujarat Sidhee Cement - India
- Independent Power Producers Association of India
- Directorate Of Revenue Intelligence - India
- SN Aboitiz Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- Grasim Industreis Ltd - India
- Vedanta Resources Plc - India
- South Luzon Thermal Energy Corporation
- Anglo American - United Kingdom
- GMR Energy Limited - India
- Mercator Lines Limited - India
- Aboitiz Power Corporation - Philippines
- Global Business Power Corporation, Philippines
- Parry Sugars Refinery, India
- Indogreen Group - Indonesia
- Maharashtra Electricity Regulatory Commission - India
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