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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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Monday, 16 September 13
CFR SOUTH CHINA COAL SWAP: STABLE TO STEADY
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 ...
Monday, 16 September 13
INDONESIAN SUB-BIT COAL SWAP STRUGGLING TO FINDS THE RIGHT PATH
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q4 2013 delivery down 0.75 percept month on month on Friday 13 Septe ...
Sunday, 15 September 13
CAPE FREIGHT RATES RISE ON HIGH DEMAND AND TIGHT AVAILABILITY - CAPT. REDDY
COALspot.com : The BDI, Cape and Panamax indices are continued to rise and saw a steep surge with average index in these segments up around 25 pct w ...
Friday, 13 September 13
US COAL OUTPUT SLIPS 3.34% ON-WEEK
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.20 million short tons (mmst) of ...
Friday, 13 September 13
DIRECTOR GENERAL OF MINERAL AND COAL OF INDONESIA REVISED UP COAL PRICE REFERENCE TO US$ 76.89
COALspot. com - The Indonesian government has revised up its owned coal bench mark price by US$ 0.19/ MT to US$ 76.89 for September 2013 deliveries ...
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- Coalindo Energy - Indonesia
- Heidelberg Cement - Germany
- Kumho Petrochemical, South Korea
- Karbindo Abesyapradhi - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Kohat Cement Company Ltd. - Pakistan
- Sindya Power Generating Company Private Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aboitiz Power Corporation - Philippines
- London Commodity Brokers - England
- Kartika Selabumi Mining - Indonesia
- Romanian Commodities Exchange
- Wilmar Investment Holdings
- Vizag Seaport Private Limited - India
- Billiton Holdings Pty Ltd - Australia
- Anglo American - United Kingdom
- ICICI Bank Limited - India
- Thai Mozambique Logistica
- San Jose City I Power Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- India Bulls Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Aditya Birla Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate Of Revenue Intelligence - India
- Africa Commodities Group - South Africa
- Leighton Contractors Pty Ltd - Australia
- Deloitte Consulting - India
- Eastern Energy - Thailand
- Trasteel International SA, Italy
- Bukit Makmur.PT - Indonesia
- Essar Steel Hazira Ltd - India
- Sical Logistics Limited - India
- GAC Shipping (India) Pvt Ltd
- Orica Australia Pty. Ltd.
- Commonwealth Bank - Australia
- Ministry of Transport, Egypt
- Malabar Cements Ltd - India
- Makarim & Taira - Indonesia
- Bhatia International Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Straits Asia Resources Limited - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Generating Authority of Thailand
- TeaM Sual Corporation - Philippines
- Latin American Coal - Colombia
- Kapuas Tunggal Persada - Indonesia
- CIMB Investment Bank - Malaysia
- Kobexindo Tractors - Indoneisa
- Edison Trading Spa - Italy
- Port Waratah Coal Services - Australia
- MS Steel International - UAE
- Renaissance Capital - South Africa
- Energy Development Corp, Philippines
- SMG Consultants - Indonesia
- Baramulti Group, Indonesia
- Bhushan Steel Limited - India
- Riau Bara Harum - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- The University of Queensland
- Marubeni Corporation - India
- Coal and Oil Company - UAE
- Tamil Nadu electricity Board
- Thiess Contractors Indonesia
- Sojitz Corporation - Japan
- Globalindo Alam Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- International Coal Ventures Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Australian Commodity Traders Exchange
- Karaikal Port Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Simpson Spence & Young - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- New Zealand Coal & Carbon
- SMC Global Power, Philippines
- Timah Investasi Mineral - Indoneisa
- Planning Commission, India
- Agrawal Coal Company - India
- Holcim Trading Pte Ltd - Singapore
- Coastal Gujarat Power Limited - India
- Semirara Mining Corp, Philippines
- Sree Jayajothi Cements Limited - India
- The State Trading Corporation of India Ltd
- Meralco Power Generation, Philippines
- Antam Resourcindo - Indonesia
- Alfred C Toepfer International GmbH - Germany
- South Luzon Thermal Energy Corporation
- Economic Council, Georgia
- Banpu Public Company Limited - Thailand
- Barasentosa Lestari - Indonesia
- Energy Link Ltd, New Zealand
- Goldman Sachs - Singapore
- Mintek Dendrill Indonesia
- Ambuja Cements Ltd - India
- Uttam Galva Steels Limited - India
- GVK Power & Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Asmin Koalindo Tuhup - Indonesia
- Independent Power Producers Association of India
- European Bulk Services B.V. - Netherlands
- The Treasury - Australian Government
- Georgia Ports Authority, United States
- Therma Luzon, Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- VISA Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Jindal Steel & Power Ltd - India
- Minerals Council of Australia
- Cement Manufacturers Association - India
- Eastern Coal Council - USA
- Indika Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Mercuria Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Price Waterhouse Coopers - Russia
- Orica Mining Services - Indonesia
- Borneo Indobara - Indonesia
- Wood Mackenzie - Singapore
- Petron Corporation, Philippines
- Mercator Lines Limited - India
- Grasim Industreis Ltd - India
- LBH Netherlands Bv - Netherlands
- PNOC Exploration Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Ministry of Finance - Indonesia
- IEA Clean Coal Centre - UK
- Petrochimia International Co. Ltd.- Taiwan
- Cigading International Bulk Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Sarangani Energy Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Oldendorff Carriers - Singapore
- Indian Energy Exchange, India
- Mjunction Services Limited - India
- Formosa Plastics Group - Taiwan
- Rashtriya Ispat Nigam Limited - India
- Rio Tinto Coal - Australia
- Star Paper Mills Limited - India
- Bharathi Cement Corporation - India
- McConnell Dowell - Australia
- Ministry of Mines - Canada
- Interocean Group of Companies - India
- Toyota Tsusho Corporation, Japan
- Iligan Light & Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- PowerSource Philippines DevCo
- Australian Coal Association
- Global Business Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Standard Chartered Bank - UAE
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sakthi Sugars Limited - India
- IHS Mccloskey Coal Group - USA
- Jaiprakash Power Ventures ltd
- Ceylon Electricity Board - Sri Lanka
- Indogreen Group - Indonesia
- Parliament of New Zealand
- Singapore Mercantile Exchange
- GN Power Mariveles Coal Plant, Philippines
- AsiaOL BioFuels Corp., Philippines
- Kideco Jaya Agung - Indonesia
- Medco Energi Mining Internasional
- Videocon Industries ltd - India
- Pendopo Energi Batubara - Indonesia
- Indonesian Coal Mining Association
- Meenaskhi Energy Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vedanta Resources Plc - India
- Siam City Cement - Thailand
- Xindia Steels Limited - India
- Posco Energy - South Korea
- Indian Oil Corporation Limited
- Siam City Cement PLC, Thailand
- CNBM International Corporation - China
- Central Java Power - Indonesia
- Ind-Barath Power Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Chamber of Mines of South Africa
- Semirara Mining and Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Central Electricity Authority - India
- Larsen & Toubro Limited - India
- Merrill Lynch Commodities Europe
- ASAPP Information Group - India
- White Energy Company Limited
- TNB Fuel Sdn Bhd - Malaysia
- PTC India Limited - India
- Savvy Resources Ltd - HongKong
- Maheswari Brothers Coal Limited - India
- Dalmia Cement Bharat India
- Carbofer General Trading SA - India
- Kaltim Prima Coal - Indonesia
- Attock Cement Pakistan Limited
- Electricity Authority, New Zealand
- Miang Besar Coal Terminal - Indonesia
- GMR Energy Limited - India
- Bangladesh Power Developement Board
- Intertek Mineral Services - Indonesia
- Bhoruka Overseas - Indonesia
- Gujarat Sidhee Cement - India
- Parry Sugars Refinery, India
- Bulk Trading Sa - Switzerland
- Tata Chemicals Ltd - India
- Bukit Baiduri Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
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