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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, 27 September 13
TAIWAN'S FORMOSA TO IMPORT 140K MT OF BITUMINOUS COAL FOR Q4
COALspot.com : Taiwan's Formosa Plastics Group is inviting bids for 140,000 mt of bituminous coal for delivery in the Q4 for its China plant.
Ac ...
Friday, 27 September 13
CAPESIZES REGAINING PART OF THEIR FORMER GLORY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The latest dry bulk market rally has been nothing short of spectacular, with freight rates more than doubling over the past few weeks. This growth h ...
Friday, 27 September 13
US PRODUCED 19.30 MMST OF COAL IN SEVEN DAYS
COALspot.com – United States the world’s second largest coal producer produced approximately 19.30 million short tons (mmst) of coal in ...
Thursday, 26 September 13
PANAMAX MARKET CONTINUE WITH STRONG RATES IN BOTH BASINS - FEARNRESEARCH
Handy
Feast rates are still firm, some fresh stems entered the market. Vessels trading around $15k passing Singapore for coal to India, and a bit l ...
Thursday, 26 September 13
INTERCARGO PUBLISHES BENCHMARKING BULK CARRIERS 2012-13 REPORT
The International Association of Dry Cargo Shipowners (Intercargo) has today launched Benchmarking Bulk Carriers 2012-13, the latest edition of our ...
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- Attock Cement Pakistan Limited
- Kobexindo Tractors - Indoneisa
- Vizag Seaport Private Limited - India
- Cigading International Bulk Terminal - Indonesia
- Bangladesh Power Developement Board
- Edison Trading Spa - Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- PetroVietnam Power Coal Import and Supply Company
- Bank of Tokyo Mitsubishi UFJ Ltd
- PTC India Limited - India
- South Luzon Thermal Energy Corporation
- The State Trading Corporation of India Ltd
- Orica Mining Services - Indonesia
- Indian Oil Corporation Limited
- Neyveli Lignite Corporation Ltd, - India
- Maheswari Brothers Coal Limited - India
- Mercuria Energy - Indonesia
- Indogreen Group - Indonesia
- Port Waratah Coal Services - Australia
- SMG Consultants - Indonesia
- Therma Luzon, Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Central Electricity Authority - India
- Coal and Oil Company - UAE
- Thai Mozambique Logistica
- Makarim & Taira - Indonesia
- Indian Energy Exchange, India
- Agrawal Coal Company - India
- Parry Sugars Refinery, India
- India Bulls Power Limited - India
- Bulk Trading Sa - Switzerland
- Mjunction Services Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Intertek Mineral Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Eastern Energy - Thailand
- Latin American Coal - Colombia
- Jaiprakash Power Ventures ltd
- Global Business Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Petrochimia International Co. Ltd.- Taiwan
- European Bulk Services B.V. - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- Sree Jayajothi Cements Limited - India
- Africa Commodities Group - South Africa
- CNBM International Corporation - China
- White Energy Company Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- San Jose City I Power Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- McConnell Dowell - Australia
- Sical Logistics Limited - India
- Sindya Power Generating Company Private Ltd
- Aditya Birla Group - India
- Malabar Cements Ltd - India
- ICICI Bank Limited - India
- Oldendorff Carriers - Singapore
- Mercator Lines Limited - India
- Bhoruka Overseas - Indonesia
- London Commodity Brokers - England
- Aboitiz Power Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- VISA Power Limited - India
- Indika Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Renaissance Capital - South Africa
- CIMB Investment Bank - Malaysia
- Singapore Mercantile Exchange
- Wood Mackenzie - Singapore
- Chamber of Mines of South Africa
- Sinarmas Energy and Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Savvy Resources Ltd - HongKong
- Central Java Power - Indonesia
- Romanian Commodities Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Banpu Public Company Limited - Thailand
- Anglo American - United Kingdom
- Merrill Lynch Commodities Europe
- Bayan Resources Tbk. - Indonesia
- Marubeni Corporation - India
- The University of Queensland
- Vijayanagar Sugar Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- Metalloyd Limited - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sojitz Corporation - Japan
- Orica Australia Pty. Ltd.
- Star Paper Mills Limited - India
- Wilmar Investment Holdings
- Australian Coal Association
- Essar Steel Hazira Ltd - India
- Indonesian Coal Mining Association
- New Zealand Coal & Carbon
- SMC Global Power, Philippines
- Larsen & Toubro Limited - India
- Uttam Galva Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Gujarat Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Baramulti Group, Indonesia
- Medco Energi Mining Internasional
- Karbindo Abesyapradhi - Indoneisa
- GVK Power & Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Videocon Industries ltd - India
- Ministry of Mines - Canada
- Eastern Coal Council - USA
- LBH Netherlands Bv - Netherlands
- MS Steel International - UAE
- IHS Mccloskey Coal Group - USA
- Dalmia Cement Bharat India
- Tamil Nadu electricity Board
- Kideco Jaya Agung - Indonesia
- Borneo Indobara - Indonesia
- Lanco Infratech Ltd - India
- Formosa Plastics Group - Taiwan
- Toyota Tsusho Corporation, Japan
- Bukit Asam (Persero) Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Bhushan Steel Limited - India
- Global Green Power PLC Corporation, Philippines
- Georgia Ports Authority, United States
- Carbofer General Trading SA - India
- Sakthi Sugars Limited - India
- Trasteel International SA, Italy
- Siam City Cement PLC, Thailand
- Semirara Mining and Power Corporation, Philippines
- Posco Energy - South Korea
- Interocean Group of Companies - India
- Price Waterhouse Coopers - Russia
- Binh Thuan Hamico - Vietnam
- Rashtriya Ispat Nigam Limited - India
- Samtan Co., Ltd - South Korea
- Commonwealth Bank - Australia
- Planning Commission, India
- Tata Chemicals Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Barasentosa Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Petron Corporation, Philippines
- Grasim Industreis Ltd - India
- Electricity Generating Authority of Thailand
- IEA Clean Coal Centre - UK
- Deloitte Consulting - India
- Bahari Cakrawala Sebuku - Indonesia
- Energy Development Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Australian Commodity Traders Exchange
- Electricity Authority, New Zealand
- Coalindo Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Madhucon Powers Ltd - India
- Mintek Dendrill Indonesia
- GAC Shipping (India) Pvt Ltd
- Independent Power Producers Association of India
- Cement Manufacturers Association - India
- SN Aboitiz Power Inc, Philippines
- The Treasury - Australian Government
- Ministry of Transport, Egypt
- Semirara Mining Corp, Philippines
- Vedanta Resources Plc - India
- Siam City Cement - Thailand
- Riau Bara Harum - Indonesia
- GMR Energy Limited - India
- Xindia Steels Limited - India
- Heidelberg Cement - Germany
- Kalimantan Lumbung Energi - Indonesia
- Thiess Contractors Indonesia
- TeaM Sual Corporation - Philippines
- Power Finance Corporation Ltd., India
- Manunggal Multi Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- ASAPP Information Group - India
- Kaltim Prima Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Meralco Power Generation, Philippines
- International Coal Ventures Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bharathi Cement Corporation - India
- Economic Council, Georgia
- Billiton Holdings Pty Ltd - Australia
- PNOC Exploration Corporation - Philippines
- Goldman Sachs - Singapore
- Altura Mining Limited, Indonesia
- Ministry of Finance - Indonesia
- Global Coal Blending Company Limited - Australia
- Timah Investasi Mineral - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Ambuja Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Antam Resourcindo - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kumho Petrochemical, South Korea
- PowerSource Philippines DevCo
- Standard Chartered Bank - UAE
- Holcim Trading Pte Ltd - Singapore
- Rio Tinto Coal - Australia
- Krishnapatnam Port Company Ltd. - India
- Minerals Council of Australia
- Ind-Barath Power Infra Limited - India
- Parliament of New Zealand
- Simpson Spence & Young - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bhatia International Limited - India
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