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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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Friday, 04 October 13
US COAL PRODUCTION UP 2.1% WEEK ON WEEK - EIA
COALspot.com – United States the world’s second largest coal producer produced approximately 19.70 million short tons (mmst) of coal in ...
Thursday, 03 October 13
INDONESIA AUGUST COAL EXPORTS FALL 12.90 % FROM JULY TO 30.71 MIL MT
COALspot.com: Indonesia, the 15th largest economy in world, 4th largest coal producer in world and world's largest multi grade coal exporter ...
Thursday, 03 October 13
TOP FOUR U.S. COAL COMPANIES SUPPLIED MORE THAN HALF OF U.S. COAL PRODUCTION IN 2011 - EIA
In the past two years, more than half of U.S. coal production was attributable to the top four coal producers, the result of changes in regional pro ...
Thursday, 03 October 13
HANDY: PERIOD MARKET STAND IN GOOD POSITION - FEARNRESEARCH
Handy
Nickel ore and Bauxite was active last week but slowed down now due to Chinese holidays. Ships opened in North China fixed at US$ 11-13k leve ...
Wednesday, 02 October 13
DRY BULK MARKET IS STILL MAINTAINING ITS UPWARD DIRECTION
Chartering (Wet: Stable- / Dry: Firm+)
Despite the fact that rates for Capes didn't continue their crazy ride this past week, the Dry Bulk market ...
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- LBH Netherlands Bv - Netherlands
- Chamber of Mines of South Africa
- Asmin Koalindo Tuhup - Indonesia
- Aboitiz Power Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Thiess Contractors Indonesia
- Meralco Power Generation, Philippines
- AsiaOL BioFuels Corp., Philippines
- India Bulls Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- SMC Global Power, Philippines
- Dalmia Cement Bharat India
- Power Finance Corporation Ltd., India
- Parry Sugars Refinery, India
- Tata Chemicals Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Timah Investasi Mineral - Indoneisa
- Straits Asia Resources Limited - Singapore
- Bharathi Cement Corporation - India
- PTC India Limited - India
- Medco Energi Mining Internasional
- Bayan Resources Tbk. - Indonesia
- Mjunction Services Limited - India
- Salva Resources Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- MS Steel International - UAE
- Iligan Light & Power Inc, Philippines
- Sical Logistics Limited - India
- Petron Corporation, Philippines
- Sakthi Sugars Limited - India
- Economic Council, Georgia
- Globalindo Alam Lestari - Indonesia
- Africa Commodities Group - South Africa
- Wilmar Investment Holdings
- Directorate General of MIneral and Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Ministry of Mines - Canada
- OPG Power Generation Pvt Ltd - India
- Bhatia International Limited - India
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Xindia Steels Limited - India
- Standard Chartered Bank - UAE
- Port Waratah Coal Services - Australia
- Mintek Dendrill Indonesia
- London Commodity Brokers - England
- Semirara Mining Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Mercuria Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Bangladesh Power Developement Board
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- Borneo Indobara - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Parliament of New Zealand
- Central Java Power - Indonesia
- Mercator Lines Limited - India
- Maheswari Brothers Coal Limited - India
- Formosa Plastics Group - Taiwan
- Uttam Galva Steels Limited - India
- Indian Oil Corporation Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kaltim Prima Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Trasteel International SA, Italy
- New Zealand Coal & Carbon
- Bahari Cakrawala Sebuku - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Altura Mining Limited, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Sinarmas Energy and Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Price Waterhouse Coopers - Russia
- South Luzon Thermal Energy Corporation
- Banpu Public Company Limited - Thailand
- GMR Energy Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Romanian Commodities Exchange
- Semirara Mining and Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Karaikal Port Pvt Ltd - India
- The University of Queensland
- Coastal Gujarat Power Limited - India
- Tamil Nadu electricity Board
- Grasim Industreis Ltd - India
- Intertek Mineral Services - Indonesia
- Ministry of Transport, Egypt
- Simpson Spence & Young - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- VISA Power Limited - India
- CNBM International Corporation - China
- Goldman Sachs - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Merrill Lynch Commodities Europe
- Agrawal Coal Company - India
- Ceylon Electricity Board - Sri Lanka
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Sidhee Cement - India
- Minerals Council of Australia
- Singapore Mercantile Exchange
- Global Coal Blending Company Limited - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sojitz Corporation - Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- San Jose City I Power Corp, Philippines
- Aditya Birla Group - India
- Cigading International Bulk Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Posco Energy - South Korea
- The Treasury - Australian Government
- Essar Steel Hazira Ltd - India
- Attock Cement Pakistan Limited
- Australian Coal Association
- Miang Besar Coal Terminal - Indonesia
- Eastern Coal Council - USA
- Larsen & Toubro Limited - India
- ASAPP Information Group - India
- Meenaskhi Energy Private Limited - India
- Metalloyd Limited - United Kingdom
- ICICI Bank Limited - India
- Indogreen Group - Indonesia
- Samtan Co., Ltd - South Korea
- Deloitte Consulting - India
- Electricity Authority, New Zealand
- Indika Energy - Indonesia
- Lanco Infratech Ltd - India
- Heidelberg Cement - Germany
- TeaM Sual Corporation - Philippines
- Siam City Cement PLC, Thailand
- Videocon Industries ltd - India
- Indian Energy Exchange, India
- PetroVietnam Power Coal Import and Supply Company
- Independent Power Producers Association of India
- Binh Thuan Hamico - Vietnam
- Toyota Tsusho Corporation, Japan
- Energy Development Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- PowerSource Philippines DevCo
- Central Electricity Authority - India
- Anglo American - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Coalindo Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Bukit Baiduri Energy - Indonesia
- Ministry of Finance - Indonesia
- GVK Power & Infra Limited - India
- CIMB Investment Bank - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- Rio Tinto Coal - Australia
- Bhushan Steel Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Manunggal Multi Energi - Indonesia
- Wood Mackenzie - Singapore
- Makarim & Taira - Indonesia
- Georgia Ports Authority, United States
- SMG Consultants - Indonesia
- Star Paper Mills Limited - India
- Bukit Makmur.PT - Indonesia
- Kumho Petrochemical, South Korea
- Oldendorff Carriers - Singapore
- McConnell Dowell - Australia
- Global Business Power Corporation, Philippines
- Siam City Cement - Thailand
- Kepco SPC Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- International Coal Ventures Pvt Ltd - India
- Australian Commodity Traders Exchange
- Kobexindo Tractors - Indoneisa
- Ambuja Cements Ltd - India
- White Energy Company Limited
- Karbindo Abesyapradhi - Indoneisa
- Renaissance Capital - South Africa
- Madhucon Powers Ltd - India
- Orica Australia Pty. Ltd.
- Bulk Trading Sa - Switzerland
- Indonesian Coal Mining Association
- Commonwealth Bank - Australia
- Interocean Group of Companies - India
- Riau Bara Harum - Indonesia
- Kartika Selabumi Mining - Indonesia
- Barasentosa Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Planning Commission, India
- Malabar Cements Ltd - India
- Cement Manufacturers Association - India
- Maharashtra Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- Bhoruka Overseas - Indonesia
- Pendopo Energi Batubara - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Carbofer General Trading SA - India
- IEA Clean Coal Centre - UK
- Pipit Mutiara Jaya. PT, Indonesia
- Vedanta Resources Plc - India
- Energy Link Ltd, New Zealand
- Thai Mozambique Logistica
- Baramulti Group, Indonesia
- Coal and Oil Company - UAE
- Latin American Coal - Colombia
- Ind-Barath Power Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Antam Resourcindo - Indonesia
- The State Trading Corporation of India Ltd
- Electricity Generating Authority of Thailand
- Eastern Energy - Thailand
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