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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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Wednesday, 04 September 13
RBCT SHIPPED 16.18 PERCENT MORE COAL IN JULY
COALspot.com - Richards Bay Coal Terminal (RBCT) is the single largest coal export terminal South African as well as in the world has shipped 6,162, ...
Wednesday, 04 September 13
SUPRAS AND HANDIES : INDONESIAN COAL CARGOES ARE SUPPORTING HEALTHY ACTIVITY LEVELS - INTERMODAL
The Dry Bulk market has pooled back a bit this week after firming for two weeks in a row. The BDI is s holding above 1,100 points and despite the sm ...
Tuesday, 03 September 13
AUSTRALIA'S NEWCASTLE PORT SHIPPED 22.93 PER CENT MORE COAL W-O-W
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 22.93 per cent week on week to 3.39 million mt for ...
Sunday, 01 September 13
COAL SWAP SHOWS MIXED TREND
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average Q4 2013 delivery 1.25 percent up month on month. The swap was moved posit ...
Sunday, 01 September 13
INDONESIA TO INDIA SPOT FREIGHT STAYS FIRM THIS WEEK - VISTAAR
COALspot.com: The freight market continued to be firm with even though the BDI and Cape index dropped by about 3 pct week on week.
The BDI was do ...
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- Metalloyd Limited - United Kingdom
- Malabar Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Carbofer General Trading SA - India
- Cement Manufacturers Association - India
- Siam City Cement PLC, Thailand
- Bulk Trading Sa - Switzerland
- Makarim & Taira - Indonesia
- Xindia Steels Limited - India
- Savvy Resources Ltd - HongKong
- Bukit Baiduri Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Sojitz Corporation - Japan
- ICICI Bank Limited - India
- Therma Luzon, Inc, Philippines
- Uttam Galva Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Binh Thuan Hamico - Vietnam
- Rashtriya Ispat Nigam Limited - India
- Heidelberg Cement - Germany
- Karaikal Port Pvt Ltd - India
- Semirara Mining Corp, Philippines
- McConnell Dowell - Australia
- Renaissance Capital - South Africa
- LBH Netherlands Bv - Netherlands
- VISA Power Limited - India
- Rio Tinto Coal - Australia
- Bharathi Cement Corporation - India
- Chettinad Cement Corporation Ltd - India
- Samtan Co., Ltd - South Korea
- Posco Energy - South Korea
- Jindal Steel & Power Ltd - India
- Salva Resources Pvt Ltd - India
- Videocon Industries ltd - India
- Medco Energi Mining Internasional
- Directorate Of Revenue Intelligence - India
- Anglo American - United Kingdom
- Standard Chartered Bank - UAE
- Thai Mozambique Logistica
- Vizag Seaport Private Limited - India
- Deloitte Consulting - India
- PowerSource Philippines DevCo
- SN Aboitiz Power Inc, Philippines
- Georgia Ports Authority, United States
- Pendopo Energi Batubara - Indonesia
- Indogreen Group - Indonesia
- Formosa Plastics Group - Taiwan
- Toyota Tsusho Corporation, Japan
- Economic Council, Georgia
- Ministry of Transport, Egypt
- Indonesian Coal Mining Association
- Borneo Indobara - Indonesia
- Barasentosa Lestari - Indonesia
- Central Electricity Authority - India
- Orica Mining Services - Indonesia
- Kumho Petrochemical, South Korea
- Indo Tambangraya Megah - Indonesia
- Parliament of New Zealand
- Planning Commission, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Marubeni Corporation - India
- Ambuja Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- CIMB Investment Bank - Malaysia
- Commonwealth Bank - Australia
- OPG Power Generation Pvt Ltd - India
- Petron Corporation, Philippines
- Port Waratah Coal Services - Australia
- Intertek Mineral Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dalmia Cement Bharat India
- Aditya Birla Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Latin American Coal - Colombia
- Miang Besar Coal Terminal - Indonesia
- SMC Global Power, Philippines
- London Commodity Brokers - England
- PNOC Exploration Corporation - Philippines
- Antam Resourcindo - Indonesia
- GAC Shipping (India) Pvt Ltd
- Edison Trading Spa - Italy
- Kepco SPC Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Simpson Spence & Young - Indonesia
- Sindya Power Generating Company Private Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Bangladesh Power Developement Board
- Kapuas Tunggal Persada - Indonesia
- Attock Cement Pakistan Limited
- Essar Steel Hazira Ltd - India
- Wood Mackenzie - Singapore
- San Jose City I Power Corp, Philippines
- Ministry of Finance - Indonesia
- Kartika Selabumi Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Sidhee Cement - India
- South Luzon Thermal Energy Corporation
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhushan Steel Limited - India
- Lanco Infratech Ltd - India
- Electricity Authority, New Zealand
- Meenaskhi Energy Private Limited - India
- GVK Power & Infra Limited - India
- Mjunction Services Limited - India
- GMR Energy Limited - India
- Africa Commodities Group - South Africa
- Eastern Energy - Thailand
- Parry Sugars Refinery, India
- Tamil Nadu electricity Board
- International Coal Ventures Pvt Ltd - India
- India Bulls Power Limited - India
- Global Coal Blending Company Limited - Australia
- IEA Clean Coal Centre - UK
- Timah Investasi Mineral - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Minerals Council of Australia
- Neyveli Lignite Corporation Ltd, - India
- Price Waterhouse Coopers - Russia
- Agrawal Coal Company - India
- Global Business Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Sarangani Energy Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
- Bhatia International Limited - India
- White Energy Company Limited
- Romanian Commodities Exchange
- Star Paper Mills Limited - India
- Holcim Trading Pte Ltd - Singapore
- ASAPP Information Group - India
- SMG Consultants - Indonesia
- Central Java Power - Indonesia
- Oldendorff Carriers - Singapore
- MS Steel International - UAE
- Kobexindo Tractors - Indoneisa
- Indian Energy Exchange, India
- Bukit Asam (Persero) Tbk - Indonesia
- CNBM International Corporation - China
- Energy Development Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- Energy Link Ltd, New Zealand
- Jaiprakash Power Ventures ltd
- Larsen & Toubro Limited - India
- Wilmar Investment Holdings
- Cigading International Bulk Terminal - Indonesia
- Orica Australia Pty. Ltd.
- Electricity Generating Authority of Thailand
- The State Trading Corporation of India Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Baramulti Group, Indonesia
- Ministry of Mines - Canada
- Global Green Power PLC Corporation, Philippines
- Eastern Coal Council - USA
- Chamber of Mines of South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Altura Mining Limited, Indonesia
- European Bulk Services B.V. - Netherlands
- Kaltim Prima Coal - Indonesia
- Indian Oil Corporation Limited
- Merrill Lynch Commodities Europe
- Indika Energy - Indonesia
- The Treasury - Australian Government
- Madhucon Powers Ltd - India
- Bayan Resources Tbk. - Indonesia
- Coastal Gujarat Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Billiton Holdings Pty Ltd - Australia
- New Zealand Coal & Carbon
- Mercator Lines Limited - India
- Vedanta Resources Plc - India
- Gujarat Mineral Development Corp Ltd - India
- PTC India Limited - India
- Banpu Public Company Limited - Thailand
- Independent Power Producers Association of India
- Straits Asia Resources Limited - Singapore
- Sical Logistics Limited - India
- Mercuria Energy - Indonesia
- Interocean Group of Companies - India
- Riau Bara Harum - Indonesia
- Australian Coal Association
- Meralco Power Generation, Philippines
- Bhoruka Overseas - Indonesia
- Singapore Mercantile Exchange
- Semirara Mining and Power Corporation, Philippines
- The University of Queensland
- AsiaOL BioFuels Corp., Philippines
- Iligan Light & Power Inc, Philippines
- Grasim Industreis Ltd - India
- Goldman Sachs - Singapore
- Sakthi Sugars Limited - India
- Trasteel International SA, Italy
- Coal and Oil Company - UAE
- Globalindo Alam Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Bukit Makmur.PT - Indonesia
- Coalindo Energy - Indonesia
- Australian Commodity Traders Exchange
- Ceylon Electricity Board - Sri Lanka
- TNB Fuel Sdn Bhd - Malaysia
- Thiess Contractors Indonesia
- Kohat Cement Company Ltd. - Pakistan
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