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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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Wednesday, 02 October 13
HOW LONG WILL THIS LATEST CAPESIZE RALLY LAST? - TASOS PAPADOPOULOS
By Tasos Papadopoulos, SnP Broker, Intermodal
The surge in iron ore trade has translated into a massive boost in daily earnings for capes; with t ...
Monday, 30 September 13
NEWCASTLE'S COAL EXPORT VOLUME CONTINUES TO SLIP
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port fell 8.38 per cent week on week to 2.67 million mt fo ...
Monday, 30 September 13
PANAMAX CHARTER RATES TOUCHING US$ 18K FOR A TRIP TO NOPAC - CAPT. REDDY
COALspot.com : The freight market continued to remain firm, BDI and the Panamax index up week ended 27 September 2013.
The cape index was fell to ...
Sunday, 29 September 13
API 8 CFR SOUTH CHINA COAL Q3 2014 DELIVERY SWAP GAINED $1.19 M-O-M
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 ...
Sunday, 29 September 13
SUB-BIT INDONESIA COAL SWAP FELL ON MONTH AND WEEK
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q4 2013 delivery fell 3.93 percept month on month on Friday 27 September 2 ...
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- Cigading International Bulk Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- SMG Consultants - Indonesia
- McConnell Dowell - Australia
- Cement Manufacturers Association - India
- SN Aboitiz Power Inc, Philippines
- Electricity Authority, New Zealand
- Bayan Resources Tbk. - Indonesia
- Indika Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Trasteel International SA, Italy
- Attock Cement Pakistan Limited
- White Energy Company Limited
- PNOC Exploration Corporation - Philippines
- Sical Logistics Limited - India
- Sree Jayajothi Cements Limited - India
- CIMB Investment Bank - Malaysia
- Essar Steel Hazira Ltd - India
- Gujarat Sidhee Cement - India
- Asmin Koalindo Tuhup - Indonesia
- Chamber of Mines of South Africa
- Australian Commodity Traders Exchange
- Kideco Jaya Agung - Indonesia
- The State Trading Corporation of India Ltd
- Sojitz Corporation - Japan
- Kohat Cement Company Ltd. - Pakistan
- Coal and Oil Company - UAE
- Heidelberg Cement - Germany
- Energy Development Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Mintek Dendrill Indonesia
- Renaissance Capital - South Africa
- Karaikal Port Pvt Ltd - India
- The University of Queensland
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kobexindo Tractors - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Minerals Council of Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Maharashtra Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- PetroVietnam Power Coal Import and Supply Company
- Globalindo Alam Lestari - Indonesia
- Indogreen Group - Indonesia
- Kepco SPC Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Wilmar Investment Holdings
- Kartika Selabumi Mining - Indonesia
- Pendopo Energi Batubara - Indonesia
- Lanco Infratech Ltd - India
- Thiess Contractors Indonesia
- PowerSource Philippines DevCo
- Independent Power Producers Association of India
- India Bulls Power Limited - India
- Banpu Public Company Limited - Thailand
- Savvy Resources Ltd - HongKong
- Aboitiz Power Corporation - Philippines
- Vizag Seaport Private Limited - India
- Latin American Coal - Colombia
- Price Waterhouse Coopers - Russia
- Maheswari Brothers Coal Limited - India
- Baramulti Group, Indonesia
- London Commodity Brokers - England
- SMC Global Power, Philippines
- Orica Mining Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- Interocean Group of Companies - India
- Madhucon Powers Ltd - India
- Meenaskhi Energy Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Tata Chemicals Ltd - India
- Salva Resources Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Australian Coal Association
- Aditya Birla Group - India
- Krishnapatnam Port Company Ltd. - India
- Antam Resourcindo - Indonesia
- Singapore Mercantile Exchange
- Semirara Mining Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Jaiprakash Power Ventures ltd
- ICICI Bank Limited - India
- Eastern Coal Council - USA
- Barasentosa Lestari - Indonesia
- Commonwealth Bank - Australia
- Planning Commission, India
- Electricity Generating Authority of Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sindya Power Generating Company Private Ltd
- Bharathi Cement Corporation - India
- Metalloyd Limited - United Kingdom
- Manunggal Multi Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Economic Council, Georgia
- Ministry of Finance - Indonesia
- Mercator Lines Limited - India
- Bulk Trading Sa - Switzerland
- Power Finance Corporation Ltd., India
- Thai Mozambique Logistica
- Neyveli Lignite Corporation Ltd, - India
- Samtan Co., Ltd - South Korea
- TeaM Sual Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Marubeni Corporation - India
- Global Coal Blending Company Limited - Australia
- GAC Shipping (India) Pvt Ltd
- Sarangani Energy Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Grasim Industreis Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Gujarat Mineral Development Corp Ltd - India
- Iligan Light & Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Eastern Energy - Thailand
- Kaltim Prima Coal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Energy Link Ltd, New Zealand
- Deloitte Consulting - India
- Siam City Cement - Thailand
- Mercuria Energy - Indonesia
- Georgia Ports Authority, United States
- Straits Asia Resources Limited - Singapore
- Xindia Steels Limited - India
- Ind-Barath Power Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Standard Chartered Bank - UAE
- VISA Power Limited - India
- Bhatia International Limited - India
- Global Business Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Indian Energy Exchange, India
- Intertek Mineral Services - Indonesia
- Bangladesh Power Developement Board
- Edison Trading Spa - Italy
- Simpson Spence & Young - Indonesia
- Meralco Power Generation, Philippines
- Indian Oil Corporation Limited
- International Coal Ventures Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Star Paper Mills Limited - India
- Vedanta Resources Plc - India
- Goldman Sachs - Singapore
- Jindal Steel & Power Ltd - India
- PTC India Limited - India
- Ministry of Transport, Egypt
- Bukit Asam (Persero) Tbk - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bukit Baiduri Energy - Indonesia
- Orica Australia Pty. Ltd.
- LBH Netherlands Bv - Netherlands
- Merrill Lynch Commodities Europe
- Wood Mackenzie - Singapore
- Tamil Nadu electricity Board
- Parliament of New Zealand
- ASAPP Information Group - India
- Siam City Cement PLC, Thailand
- Altura Mining Limited, Indonesia
- Ministry of Mines - Canada
- Africa Commodities Group - South Africa
- Ambuja Cements Ltd - India
- Oldendorff Carriers - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kumho Petrochemical, South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Therma Luzon, Inc, Philippines
- Coalindo Energy - Indonesia
- Mjunction Services Limited - India
- Agrawal Coal Company - India
- New Zealand Coal & Carbon
- Miang Besar Coal Terminal - Indonesia
- Medco Energi Mining Internasional
- Alfred C Toepfer International GmbH - Germany
- Sakthi Sugars Limited - India
- Malabar Cements Ltd - India
- MS Steel International - UAE
- Uttam Galva Steels Limited - India
- Indonesian Coal Mining Association
- Central Java Power - Indonesia
- Binh Thuan Hamico - Vietnam
- GMR Energy Limited - India
- Parry Sugars Refinery, India
- Vijayanagar Sugar Pvt Ltd - India
- Rio Tinto Coal - Australia
- Riau Bara Harum - Indonesia
- Anglo American - United Kingdom
- Timah Investasi Mineral - Indoneisa
- CNBM International Corporation - China
- Leighton Contractors Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Borneo Indobara - Indonesia
- The Treasury - Australian Government
- Central Electricity Authority - India
- Petron Corporation, Philippines
- Port Waratah Coal Services - Australia
- Billiton Holdings Pty Ltd - Australia
- IHS Mccloskey Coal Group - USA
- Bhushan Steel Limited - India
- Romanian Commodities Exchange
- South Luzon Thermal Energy Corporation
- Sinarmas Energy and Mining - Indonesia
- Videocon Industries ltd - India
- Makarim & Taira - Indonesia
- Bhoruka Overseas - Indonesia
- Bukit Makmur.PT - Indonesia
- GVK Power & Infra Limited - India
- Posco Energy - South Korea
- IEA Clean Coal Centre - UK
- Rashtriya Ispat Nigam Limited - India
- Coastal Gujarat Power Limited - India
- Carbofer General Trading SA - India
- Pipit Mutiara Jaya. PT, Indonesia
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