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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, 20 September 13
US COAL PRODUCTION SLIGHTLY UP WEEK ON WEEK
COALspot.com – United States the world’s second largest coal producer produced totalled approximately 20.30 million short tons (mmst) of ...
Friday, 20 September 13
COLOMBIA SHIPPED 31.14 MILLION TONS OF THERMAL COAL IN H1
COALspot.com : Colombia’s coal exports fell by 20.59 percent in June 2013 compared to Colombia’s May's export of 7,633,579 MT.
Colom ...
Thursday, 19 September 13
CAPESIZE : AVERAGE DAILY EARNINGS HAVE GAINED ALMOST USD 6K WOW - FEARNLEYS
Handy
The rates in Feast are still firm this week even the activity calmed down a bit as chrtrs are not in a rush to cover even their end Sept carg ...
Wednesday, 18 September 13
IRON ORE AND ZINC ARE BEST PERFORMING MINING SECTORS IN CURRENT LOW PRICE, HIGH COST ENVIRONMENT - WOOD MACKENZIE
With the fall in commodity prices, cash margins in the mining industry have come under pressure. Accordingly, producers and investors are placing in ...
Wednesday, 18 September 13
DRY BULK MARKET CONTINUED TO ADVANCE - INTERMODAL
Chartering (Wet: Stable- / Dry: Firm+ )
The Dry Bulk market continued to advance at a very fast pace, with the BDI closing off the week north ...
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- Sarangani Energy Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Rio Tinto Coal - Australia
- Aboitiz Power Corporation - Philippines
- Semirara Mining Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- Power Finance Corporation Ltd., India
- Singapore Mercantile Exchange
- Indika Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Billiton Holdings Pty Ltd - Australia
- Indian Energy Exchange, India
- Renaissance Capital - South Africa
- Wilmar Investment Holdings
- Karbindo Abesyapradhi - Indoneisa
- McConnell Dowell - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Sindya Power Generating Company Private Ltd
- Coalindo Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Aditya Birla Group - India
- Independent Power Producers Association of India
- PetroVietnam Power Coal Import and Supply Company
- Agrawal Coal Company - India
- SN Aboitiz Power Inc, Philippines
- Parliament of New Zealand
- Merrill Lynch Commodities Europe
- Malabar Cements Ltd - India
- Anglo American - United Kingdom
- Pendopo Energi Batubara - Indonesia
- Binh Thuan Hamico - Vietnam
- Posco Energy - South Korea
- Mjunction Services Limited - India
- Thiess Contractors Indonesia
- GAC Shipping (India) Pvt Ltd
- Toyota Tsusho Corporation, Japan
- Lanco Infratech Ltd - India
- Attock Cement Pakistan Limited
- Global Business Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- Georgia Ports Authority, United States
- European Bulk Services B.V. - Netherlands
- Kobexindo Tractors - Indoneisa
- White Energy Company Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- CIMB Investment Bank - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Intertek Mineral Services - Indonesia
- Meralco Power Generation, Philippines
- Riau Bara Harum - Indonesia
- Ministry of Finance - Indonesia
- Samtan Co., Ltd - South Korea
- Minerals Council of Australia
- Simpson Spence & Young - Indonesia
- Bangladesh Power Developement Board
- Siam City Cement PLC, Thailand
- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- Edison Trading Spa - Italy
- Chettinad Cement Corporation Ltd - India
- Latin American Coal - Colombia
- Medco Energi Mining Internasional
- CNBM International Corporation - China
- Petron Corporation, Philippines
- Ministry of Transport, Egypt
- Electricity Authority, New Zealand
- Altura Mining Limited, Indonesia
- Eastern Coal Council - USA
- MS Steel International - UAE
- Bayan Resources Tbk. - Indonesia
- Videocon Industries ltd - India
- Carbofer General Trading SA - India
- Energy Development Corp, Philippines
- Baramulti Group, Indonesia
- New Zealand Coal & Carbon
- Pipit Mutiara Jaya. PT, Indonesia
- Coastal Gujarat Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Tata Chemicals Ltd - India
- Planning Commission, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Formosa Plastics Group - Taiwan
- Krishnapatnam Port Company Ltd. - India
- GN Power Mariveles Coal Plant, Philippines
- Savvy Resources Ltd - HongKong
- PNOC Exploration Corporation - Philippines
- ASAPP Information Group - India
- Makarim & Taira - Indonesia
- TeaM Sual Corporation - Philippines
- Sakthi Sugars Limited - India
- PTC India Limited - India
- Leighton Contractors Pty Ltd - Australia
- Eastern Energy - Thailand
- Bharathi Cement Corporation - India
- Mercator Lines Limited - India
- Deloitte Consulting - India
- Australian Commodity Traders Exchange
- Mercuria Energy - Indonesia
- Grasim Industreis Ltd - India
- Larsen & Toubro Limited - India
- Central Java Power - Indonesia
- Trasteel International SA, Italy
- Cement Manufacturers Association - India
- Alfred C Toepfer International GmbH - Germany
- Directorate Of Revenue Intelligence - India
- Price Waterhouse Coopers - Russia
- Ind-Barath Power Infra Limited - India
- Jaiprakash Power Ventures ltd
- Kalimantan Lumbung Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement - Thailand
- Orica Mining Services - Indonesia
- Mintek Dendrill Indonesia
- GVK Power & Infra Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Kideco Jaya Agung - Indonesia
- Borneo Indobara - Indonesia
- Marubeni Corporation - India
- Iligan Light & Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Straits Asia Resources Limited - Singapore
- Interocean Group of Companies - India
- The Treasury - Australian Government
- OPG Power Generation Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Indogreen Group - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Uttam Galva Steels Limited - India
- Star Paper Mills Limited - India
- Vedanta Resources Plc - India
- Holcim Trading Pte Ltd - Singapore
- Ministry of Mines - Canada
- Kartika Selabumi Mining - Indonesia
- Bhatia International Limited - India
- Coal and Oil Company - UAE
- Meenaskhi Energy Private Limited - India
- Bukit Makmur.PT - Indonesia
- India Bulls Power Limited - India
- Kaltim Prima Coal - Indonesia
- Orica Australia Pty. Ltd.
- Neyveli Lignite Corporation Ltd, - India
- IHS Mccloskey Coal Group - USA
- Essar Steel Hazira Ltd - India
- Antam Resourcindo - Indonesia
- GMR Energy Limited - India
- Jindal Steel & Power Ltd - India
- Romanian Commodities Exchange
- Indonesian Coal Mining Association
- London Commodity Brokers - England
- Parry Sugars Refinery, India
- Global Green Power PLC Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- The University of Queensland
- Semirara Mining and Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- San Jose City I Power Corp, Philippines
- Bhushan Steel Limited - India
- Therma Luzon, Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Economic Council, Georgia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kapuas Tunggal Persada - Indonesia
- Central Electricity Authority - India
- Dalmia Cement Bharat India
- Sical Logistics Limited - India
- Indian Oil Corporation Limited
- Wood Mackenzie - Singapore
- Xindia Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- PowerSource Philippines DevCo
- Oldendorff Carriers - Singapore
- Kumho Petrochemical, South Korea
- Banpu Public Company Limited - Thailand
- Electricity Generating Authority of Thailand
- IEA Clean Coal Centre - UK
- Metalloyd Limited - United Kingdom
- Bulk Trading Sa - Switzerland
- SMC Global Power, Philippines
- VISA Power Limited - India
- Ambuja Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- Commonwealth Bank - Australia
- Africa Commodities Group - South Africa
- Madhucon Powers Ltd - India
- Karaikal Port Pvt Ltd - India
- Tamil Nadu electricity Board
- Standard Chartered Bank - UAE
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Mineral Development Corp Ltd - India
- Goldman Sachs - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Australian Coal Association
- Kepco SPC Power Corporation, Philippines
- Chamber of Mines of South Africa
- Sinarmas Energy and Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- Sojitz Corporation - Japan
- SMG Consultants - Indonesia
- Heidelberg Cement - Germany
- Bukit Baiduri Energy - Indonesia
- Gujarat Sidhee Cement - India
- Bhoruka Overseas - Indonesia
- Sree Jayajothi Cements Limited - India
- Barasentosa Lestari - Indonesia
- ICICI Bank Limited - India
- Gujarat Electricity Regulatory Commission - India
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