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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, 26 September 13
DRY BULK MARKET KEEPS ON RALLYING ON THE BACK OF HIGH CAPESIZE DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has kept its momentum over the course of the past week, on the back of increased demand for Capesizes and an improvement of mark ...
Wednesday, 25 September 13
RBCT'S COAL EXPORT DECLINES IN AUGUST
COALspot.com - Richards Bay Coal Terminal (RBCT) is the single largest coal export terminal in South African as well as in the world has shipped 16. ...
Wednesday, 25 September 13
CAPES TOUCHING RATES NO ONE BELIEVED COULD BE ACHIEVED IN 2013 - INTERMODAL
Chartering (Wet: Stable- / Dry: Firm+ )
The Dry Bulk market is the gift that keeps on giving these days. With rates for Capes touching numbers ...
Wednesday, 25 September 13
IS IT TIME AGAIN TO SUPERSIZE AGAIN? - GEORGE LAZARIDIS
After an early arrival of the seasonal rally in the Capesize market, things look to be on the upbeat for these dry bulk giants. With the Index reach ...
Monday, 23 September 13
AUSTRALIA'S NEWCASTLE PORT SHIPPED 3 PERCENT LESS COAL WEEK ON WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port fell 3 per cent week on week to 2.92 million mt for t ...
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- Petrochimia International Co. Ltd.- Taiwan
- Larsen & Toubro Limited - India
- ICICI Bank Limited - India
- Simpson Spence & Young - Indonesia
- Directorate Of Revenue Intelligence - India
- Ceylon Electricity Board - Sri Lanka
- India Bulls Power Limited - India
- Central Java Power - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Australian Coal Association
- Bayan Resources Tbk. - Indonesia
- Eastern Energy - Thailand
- Bulk Trading Sa - Switzerland
- OPG Power Generation Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Gujarat Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- Globalindo Alam Lestari - Indonesia
- Mintek Dendrill Indonesia
- Toyota Tsusho Corporation, Japan
- Manunggal Multi Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Planning Commission, India
- Bukit Makmur.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- International Coal Ventures Pvt Ltd - India
- Rio Tinto Coal - Australia
- Heidelberg Cement - Germany
- Indian Oil Corporation Limited
- Global Green Power PLC Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Chamber of Mines of South Africa
- Merrill Lynch Commodities Europe
- Parry Sugars Refinery, India
- Singapore Mercantile Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indo Tambangraya Megah - Indonesia
- Mercator Lines Limited - India
- Aditya Birla Group - India
- Siam City Cement PLC, Thailand
- Minerals Council of Australia
- SMG Consultants - Indonesia
- Power Finance Corporation Ltd., India
- Xindia Steels Limited - India
- Standard Chartered Bank - UAE
- Star Paper Mills Limited - India
- The State Trading Corporation of India Ltd
- PNOC Exploration Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Therma Luzon, Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Dalmia Cement Bharat India
- CIMB Investment Bank - Malaysia
- Kumho Petrochemical, South Korea
- Edison Trading Spa - Italy
- MS Steel International - UAE
- Grasim Industreis Ltd - India
- Formosa Plastics Group - Taiwan
- Agrawal Coal Company - India
- The Treasury - Australian Government
- Ministry of Mines - Canada
- Iligan Light & Power Inc, Philippines
- Bhatia International Limited - India
- Ind-Barath Power Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Electricity Authority, New Zealand
- Barasentosa Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Tata Chemicals Ltd - India
- GAC Shipping (India) Pvt Ltd
- Sakthi Sugars Limited - India
- Commonwealth Bank - Australia
- Mercuria Energy - Indonesia
- Altura Mining Limited, Indonesia
- Kartika Selabumi Mining - Indonesia
- Ministry of Transport, Egypt
- Siam City Cement - Thailand
- VISA Power Limited - India
- Economic Council, Georgia
- Trasteel International SA, Italy
- PowerSource Philippines DevCo
- SN Aboitiz Power Inc, Philippines
- Attock Cement Pakistan Limited
- Tamil Nadu electricity Board
- Uttam Galva Steels Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Finance - Indonesia
- Kobexindo Tractors - Indoneisa
- Sree Jayajothi Cements Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Oldendorff Carriers - Singapore
- Maharashtra Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Sindya Power Generating Company Private Ltd
- Jaiprakash Power Ventures ltd
- Sinarmas Energy and Mining - Indonesia
- Samtan Co., Ltd - South Korea
- Bharathi Cement Corporation - India
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Port Waratah Coal Services - Australia
- Salva Resources Pvt Ltd - India
- Makarim & Taira - Indonesia
- Romanian Commodities Exchange
- Electricity Generating Authority of Thailand
- Thiess Contractors Indonesia
- Maheswari Brothers Coal Limited - India
- Wilmar Investment Holdings
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indika Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- ASAPP Information Group - India
- Ambuja Cements Ltd - India
- London Commodity Brokers - England
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petron Corporation, Philippines
- Savvy Resources Ltd - HongKong
- PTC India Limited - India
- South Luzon Thermal Energy Corporation
- Energy Development Corp, Philippines
- Price Waterhouse Coopers - Russia
- Antam Resourcindo - Indonesia
- Renaissance Capital - South Africa
- Georgia Ports Authority, United States
- Kaltim Prima Coal - Indonesia
- Independent Power Producers Association of India
- Madhucon Powers Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Meenaskhi Energy Private Limited - India
- Sical Logistics Limited - India
- Deloitte Consulting - India
- Bukit Asam (Persero) Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kideco Jaya Agung - Indonesia
- Mjunction Services Limited - India
- Borneo Indobara - Indonesia
- GVK Power & Infra Limited - India
- Global Coal Blending Company Limited - Australia
- Chettinad Cement Corporation Ltd - India
- Vizag Seaport Private Limited - India
- Anglo American - United Kingdom
- McConnell Dowell - Australia
- Eastern Coal Council - USA
- Parliament of New Zealand
- Lanco Infratech Ltd - India
- Binh Thuan Hamico - Vietnam
- Indonesian Coal Mining Association
- Directorate General of MIneral and Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Holcim Trading Pte Ltd - Singapore
- Orica Mining Services - Indonesia
- Meralco Power Generation, Philippines
- Videocon Industries ltd - India
- Bhushan Steel Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Australian Commodity Traders Exchange
- Kepco SPC Power Corporation, Philippines
- Goldman Sachs - Singapore
- Riau Bara Harum - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Latin American Coal - Colombia
- Bukit Baiduri Energy - Indonesia
- Vedanta Resources Plc - India
- Miang Besar Coal Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Interocean Group of Companies - India
- Coalindo Energy - Indonesia
- Coal and Oil Company - UAE
- GMR Energy Limited - India
- Kalimantan Lumbung Energi - Indonesia
- The University of Queensland
- TNB Fuel Sdn Bhd - Malaysia
- Banpu Public Company Limited - Thailand
- Alfred C Toepfer International GmbH - Germany
- Baramulti Group, Indonesia
- Jindal Steel & Power Ltd - India
- Aboitiz Power Corporation - Philippines
- Gujarat Sidhee Cement - India
- Semirara Mining and Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Medco Energi Mining Internasional
- Timah Investasi Mineral - Indoneisa
- CNBM International Corporation - China
- Karaikal Port Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Bangladesh Power Developement Board
- Indian Energy Exchange, India
- Leighton Contractors Pty Ltd - Australia
- Central Electricity Authority - India
- Global Business Power Corporation, Philippines
- Posco Energy - South Korea
- Marubeni Corporation - India
- Pendopo Energi Batubara - Indonesia
- Wood Mackenzie - Singapore
- Indogreen Group - Indonesia
- Coastal Gujarat Power Limited - India
- Malabar Cements Ltd - India
- IEA Clean Coal Centre - UK
- Essar Steel Hazira Ltd - India
- San Jose City I Power Corp, Philippines
- Thai Mozambique Logistica
- Carbofer General Trading SA - India
- SMC Global Power, Philippines
- Energy Link Ltd, New Zealand
- Sojitz Corporation - Japan
- White Energy Company Limited
- Africa Commodities Group - South Africa
- Rashtriya Ispat Nigam Limited - India
- Kohat Cement Company Ltd. - Pakistan
- LBH Netherlands Bv - Netherlands
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