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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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Tuesday, 17 September 13
BUMA PRODUCED 3.57 PERCENT MORE COAL IN AUGUST
COALspot.com: BUMA has removed totaled 25.20 million bcm of overburden to produce 2.90 million tons coal in August 2013. BUMI produced 3.07 percent ...
Tuesday, 17 September 13
NEWCASTLE PORT SHIPPED ABOUT 27 PERCENT MORE COAL WEEK ON WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 27.26 per cent week on week to 3.01 million mt for ...
Tuesday, 17 September 13
TAIPOWER INVITES BIDS FOR SUPPLY OF SUB-BITUMINOUS COAL
COALspot.com - Taiwan Power Company intends to procure 1.050 million tons of sub-bituminous coal for Taipower thermal power plant through open tende ...
Tuesday, 17 September 13
ORPHEUS SECURES SIGNIFICANT INFRASTRUCTURE DEAL THROUGH ACQUISITION OF SOUTH KALIMANTAN PORT CAPACITY
COALspot.com : Orpheus Energy Limited (ASX: OEG) of Australia has today announced that, it has executed a binding agreement with the proprietor of S ...
Monday, 16 September 13
WHAT RECOVERY MEANS FOR THE CAPESIZE MARKET - COMMODORE RESEARCH
COALspot.com: The simple fact that capesize rates have been able to increase above the $9,000/mark and become much more responsive to changes in car ...
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- PetroVietnam Power Coal Import and Supply Company
- Orica Mining Services - Indonesia
- Kumho Petrochemical, South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Gujarat Sidhee Cement - India
- Global Business Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Bhushan Steel Limited - India
- Vizag Seaport Private Limited - India
- Ministry of Finance - Indonesia
- Simpson Spence & Young - Indonesia
- The University of Queensland
- Carbofer General Trading SA - India
- Sree Jayajothi Cements Limited - India
- Petron Corporation, Philippines
- Anglo American - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- Renaissance Capital - South Africa
- Orica Australia Pty. Ltd.
- Oldendorff Carriers - Singapore
- Central Electricity Authority - India
- Sical Logistics Limited - India
- Eastern Coal Council - USA
- Wilmar Investment Holdings
- SMC Global Power, Philippines
- Kohat Cement Company Ltd. - Pakistan
- LBH Netherlands Bv - Netherlands
- Kobexindo Tractors - Indoneisa
- Romanian Commodities Exchange
- Coal and Oil Company - UAE
- Therma Luzon, Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- GVK Power & Infra Limited - India
- Manunggal Multi Energi - Indonesia
- Cement Manufacturers Association - India
- MS Steel International - UAE
- Salva Resources Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Indonesian Coal Mining Association
- Bayan Resources Tbk. - Indonesia
- Savvy Resources Ltd - HongKong
- Rashtriya Ispat Nigam Limited - India
- Deloitte Consulting - India
- Aboitiz Power Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Grasim Industreis Ltd - India
- San Jose City I Power Corp, Philippines
- Star Paper Mills Limited - India
- Kapuas Tunggal Persada - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- PowerSource Philippines DevCo
- Directorate Of Revenue Intelligence - India
- Malabar Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TeaM Sual Corporation - Philippines
- Madhucon Powers Ltd - India
- India Bulls Power Limited - India
- New Zealand Coal & Carbon
- Latin American Coal - Colombia
- Indika Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Tata Chemicals Ltd - India
- Parry Sugars Refinery, India
- Bhatia International Limited - India
- Jindal Steel & Power Ltd - India
- Africa Commodities Group - South Africa
- Port Waratah Coal Services - Australia
- Banpu Public Company Limited - Thailand
- Sindya Power Generating Company Private Ltd
- Larsen & Toubro Limited - India
- Agrawal Coal Company - India
- Riau Bara Harum - Indonesia
- Altura Mining Limited, Indonesia
- Mintek Dendrill Indonesia
- Trasteel International SA, Italy
- European Bulk Services B.V. - Netherlands
- Interocean Group of Companies - India
- Wood Mackenzie - Singapore
- Ind-Barath Power Infra Limited - India
- VISA Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- GMR Energy Limited - India
- Bhoruka Overseas - Indonesia
- Mercator Lines Limited - India
- Timah Investasi Mineral - Indoneisa
- Xindia Steels Limited - India
- Posco Energy - South Korea
- Gujarat Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- Heidelberg Cement - Germany
- Sojitz Corporation - Japan
- Parliament of New Zealand
- OPG Power Generation Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- PTC India Limited - India
- Siam City Cement - Thailand
- Thai Mozambique Logistica
- Meenaskhi Energy Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Krishnapatnam Port Company Ltd. - India
- Energy Development Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Rio Tinto Coal - Australia
- Standard Chartered Bank - UAE
- Bangladesh Power Developement Board
- Coalindo Energy - Indonesia
- The State Trading Corporation of India Ltd
- IHS Mccloskey Coal Group - USA
- Kepco SPC Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Minerals Council of Australia
- Jorong Barutama Greston.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Intertek Mineral Services - Indonesia
- IEA Clean Coal Centre - UK
- Sinarmas Energy and Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Mercuria Energy - Indonesia
- Energy Link Ltd, New Zealand
- McConnell Dowell - Australia
- Sakthi Sugars Limited - India
- Siam City Cement PLC, Thailand
- Australian Coal Association
- Eastern Energy - Thailand
- ICICI Bank Limited - India
- Maharashtra Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Indian Oil Corporation Limited
- Kideco Jaya Agung - Indonesia
- Chettinad Cement Corporation Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Georgia Ports Authority, United States
- Electricity Authority, New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Uttam Galva Steels Limited - India
- Pendopo Energi Batubara - Indonesia
- SN Aboitiz Power Inc, Philippines
- Central Java Power - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Goldman Sachs - Singapore
- Cigading International Bulk Terminal - Indonesia
- Independent Power Producers Association of India
- The Treasury - Australian Government
- Planning Commission, India
- Indian Energy Exchange, India
- London Commodity Brokers - England
- Indogreen Group - Indonesia
- Attock Cement Pakistan Limited
- Globalindo Alam Lestari - Indonesia
- Borneo Indobara - Indonesia
- Bharathi Cement Corporation - India
- Chamber of Mines of South Africa
- Makarim & Taira - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Meralco Power Generation, Philippines
- Straits Asia Resources Limited - Singapore
- Aditya Birla Group - India
- Neyveli Lignite Corporation Ltd, - India
- Marubeni Corporation - India
- Ambuja Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Commonwealth Bank - Australia
- Baramulti Group, Indonesia
- Jaiprakash Power Ventures ltd
- Thiess Contractors Indonesia
- GAC Shipping (India) Pvt Ltd
- Medco Energi Mining Internasional
- Vedanta Resources Plc - India
- Iligan Light & Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- Coastal Gujarat Power Limited - India
- Economic Council, Georgia
- Maheswari Brothers Coal Limited - India
- Australian Commodity Traders Exchange
- Kaltim Prima Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Singapore Mercantile Exchange
- Barasentosa Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- Electricity Generating Authority of Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kartika Selabumi Mining - Indonesia
- CNBM International Corporation - China
- Mjunction Services Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Lanco Infratech Ltd - India
- White Energy Company Limited
- Directorate General of MIneral and Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Price Waterhouse Coopers - Russia
- Indo Tambangraya Megah - Indonesia
- Binh Thuan Hamico - Vietnam
- Karaikal Port Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Ministry of Mines - Canada
- Tamil Nadu electricity Board
- SMG Consultants - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Merrill Lynch Commodities Europe
- PNOC Exploration Corporation - Philippines
- Ministry of Transport, Egypt
- Bulk Trading Sa - Switzerland
- Videocon Industries ltd - India
- ASAPP Information Group - India
- Kalimantan Lumbung Energi - Indonesia
- Dalmia Cement Bharat India
- Bahari Cakrawala Sebuku - Indonesia
- Edison Trading Spa - Italy
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