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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, 06 September 13
DRY BULK MARKET REACHES NEW YEAR-HIGHS ON THE BACK OF INCREASED CAPESIZE DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has been on the rise once again, but this time around any new increase of freight rates translates into new year-highs, thus bri ...
Friday, 06 September 13
US PRODUCED APPROXIMATELY 90.80 MMST OF COAL IN AUGUST
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.90 million short tons (mmst) of ...
Thursday, 05 September 13
INDONESIAN COAL EXPORTS UP BY 6.72 PERCENT IN JULY
COALspot.com: Indonesia, the world's largest multi grade coal exporter shipped 35.268* million tons of coal in July 2013. Indonesian coal exp ...
Thursday, 05 September 13
HANDY: NICKEL ORE WAS PUSHING THE FAR EAST MARKET - FEARNLEYS
Handy
Nickel Ore was pushing the Feast market, several ships were fixed from low teens to $14k. Indo/India was still supported by bauxite, while th ...
Thursday, 05 September 13
DRY BULK MARKET ON A HIGH ROLL, MAINLY THANKS TO CAPESIZE APPETITE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Capesize owners have been rejoycing on the back of renewed optimism for the further rise in the dry bulk market's freight rates, especially when on ...
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- Simpson Spence & Young - Indonesia
- Indian Oil Corporation Limited
- Malabar Cements Ltd - India
- Parry Sugars Refinery, India
- Directorate Of Revenue Intelligence - India
- Global Business Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Australia Pty. Ltd.
- Posco Energy - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining Corp, Philippines
- Grasim Industreis Ltd - India
- PowerSource Philippines DevCo
- Commonwealth Bank - Australia
- Antam Resourcindo - Indonesia
- Chamber of Mines of South Africa
- AsiaOL BioFuels Corp., Philippines
- Singapore Mercantile Exchange
- LBH Netherlands Bv - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Australian Commodity Traders Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Africa Commodities Group - South Africa
- Thai Mozambique Logistica
- International Coal Ventures Pvt Ltd - India
- Renaissance Capital - South Africa
- Karbindo Abesyapradhi - Indoneisa
- SMG Consultants - Indonesia
- Mercator Lines Limited - India
- Mjunction Services Limited - India
- IHS Mccloskey Coal Group - USA
- Gujarat Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Indo Tambangraya Megah - Indonesia
- Riau Bara Harum - Indonesia
- McConnell Dowell - Australia
- Rashtriya Ispat Nigam Limited - India
- Dalmia Cement Bharat India
- Eastern Energy - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Indian Energy Exchange, India
- Ambuja Cements Ltd - India
- Tamil Nadu electricity Board
- Aditya Birla Group - India
- IEA Clean Coal Centre - UK
- PetroVietnam Power Coal Import and Supply Company
- Neyveli Lignite Corporation Ltd, - India
- Kapuas Tunggal Persada - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bhatia International Limited - India
- Merrill Lynch Commodities Europe
- Latin American Coal - Colombia
- Global Coal Blending Company Limited - Australia
- VISA Power Limited - India
- Economic Council, Georgia
- Makarim & Taira - Indonesia
- Bhoruka Overseas - Indonesia
- Bangladesh Power Developement Board
- Iligan Light & Power Inc, Philippines
- Baramulti Group, Indonesia
- Trasteel International SA, Italy
- European Bulk Services B.V. - Netherlands
- Binh Thuan Hamico - Vietnam
- Planning Commission, India
- Ceylon Electricity Board - Sri Lanka
- Alfred C Toepfer International GmbH - Germany
- TNB Fuel Sdn Bhd - Malaysia
- Samtan Co., Ltd - South Korea
- Bayan Resources Tbk. - Indonesia
- Videocon Industries ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The State Trading Corporation of India Ltd
- Sical Logistics Limited - India
- Therma Luzon, Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Minerals Council of Australia
- Vizag Seaport Private Limited - India
- GVK Power & Infra Limited - India
- Carbofer General Trading SA - India
- Medco Energi Mining Internasional
- Essar Steel Hazira Ltd - India
- SN Aboitiz Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Kumho Petrochemical, South Korea
- PNOC Exploration Corporation - Philippines
- Mintek Dendrill Indonesia
- Port Waratah Coal Services - Australia
- Vedanta Resources Plc - India
- Electricity Authority, New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- Barasentosa Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Metalloyd Limited - United Kingdom
- Bukit Baiduri Energy - Indonesia
- SMC Global Power, Philippines
- Sindya Power Generating Company Private Ltd
- Goldman Sachs - Singapore
- Coal and Oil Company - UAE
- Rio Tinto Coal - Australia
- GMR Energy Limited - India
- Attock Cement Pakistan Limited
- Anglo American - United Kingdom
- London Commodity Brokers - England
- Central Electricity Authority - India
- Petrochimia International Co. Ltd.- Taiwan
- Parliament of New Zealand
- CNBM International Corporation - China
- Siam City Cement - Thailand
- Kepco SPC Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Altura Mining Limited, Indonesia
- Meralco Power Generation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Indogreen Group - Indonesia
- Wood Mackenzie - Singapore
- New Zealand Coal & Carbon
- ASAPP Information Group - India
- TeaM Sual Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Bhushan Steel Limited - India
- Energy Development Corp, Philippines
- Central Java Power - Indonesia
- Coalindo Energy - Indonesia
- Romanian Commodities Exchange
- Energy Link Ltd, New Zealand
- Kobexindo Tractors - Indoneisa
- Formosa Plastics Group - Taiwan
- Ministry of Transport, Egypt
- MS Steel International - UAE
- GN Power Mariveles Coal Plant, Philippines
- Jaiprakash Power Ventures ltd
- Tata Chemicals Ltd - India
- Orica Mining Services - Indonesia
- Eastern Coal Council - USA
- Ind-Barath Power Infra Limited - India
- Siam City Cement PLC, Thailand
- South Luzon Thermal Energy Corporation
- Savvy Resources Ltd - HongKong
- Electricity Generating Authority of Thailand
- Coastal Gujarat Power Limited - India
- Lanco Infratech Ltd - India
- Manunggal Multi Energi - Indonesia
- Xindia Steels Limited - India
- Independent Power Producers Association of India
- India Bulls Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Sojitz Corporation - Japan
- Marubeni Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Chettinad Cement Corporation Ltd - India
- Ministry of Finance - Indonesia
- Ministry of Mines - Canada
- Toyota Tsusho Corporation, Japan
- Bukit Asam (Persero) Tbk - Indonesia
- Borneo Indobara - Indonesia
- Mercuria Energy - Indonesia
- The Treasury - Australian Government
- Indika Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Deloitte Consulting - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thiess Contractors Indonesia
- PTC India Limited - India
- Sinarmas Energy and Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Star Paper Mills Limited - India
- Price Waterhouse Coopers - Russia
- Meenaskhi Energy Private Limited - India
- Kartika Selabumi Mining - Indonesia
- Larsen & Toubro Limited - India
- Cement Manufacturers Association - India
- Georgia Ports Authority, United States
- Interocean Group of Companies - India
- Global Green Power PLC Corporation, Philippines
- Madhucon Powers Ltd - India
- The University of Queensland
- Kalimantan Lumbung Energi - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Australian Coal Association
- Petron Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Sakthi Sugars Limited - India
- Uttam Galva Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Agrawal Coal Company - India
- Banpu Public Company Limited - Thailand
- ICICI Bank Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Timah Investasi Mineral - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bulk Trading Sa - Switzerland
- White Energy Company Limited
- Sarangani Energy Corporation, Philippines
- Bharathi Cement Corporation - India
- CIMB Investment Bank - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Power Finance Corporation Ltd., India
- Leighton Contractors Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- Karaikal Port Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Oldendorff Carriers - Singapore
- Salva Resources Pvt Ltd - India
- Standard Chartered Bank - UAE
- Globalindo Alam Lestari - Indonesia
- Heidelberg Cement - Germany
- Intertek Mineral Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- Wilmar Investment Holdings
- Edison Trading Spa - Italy
- Bukit Makmur.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
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