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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, 30 August 13
US COAL PRODUCTION FELL 0.48 PERCENT WEEK ON WEEK - EIA
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.70 million short tons (mmst) of ...
Thursday, 29 August 13
HANDY: THE PACIFIC MARKET STARTED HEALTHY THIS WEEK - FEARNRESEARCH
Handy
The Pacific market started healthy this week. We have seen many bauxite, iron ore and few coal fixtures. Ships passing Singapore were able to ...
Thursday, 29 August 13
NO RATING IMPACT ON INDONESIAN ENERGY COMPANIES FROM RUPIAH DEPRECIATION - FITCH RATINGS
Fitch Ratings says the credit profiles of rated Indonesian energy and utilities companies, including thermal coal producers, will largely remain una ...
Wednesday, 28 August 13
THE BDI HAS MOVED TO LEVELS CONSIDERABLY STRONGER THAN THE BEGINNING OF THE YEAR - INTERMODAL
By George Bassakos
SnP Broker - Intermodal
We have already reached the end of August and whilst students are preparing themselves for another sc ...
Tuesday, 27 August 13
AUSTRALIA NEWCASTLE COAL EXPORTS JUMPED 15.59 PERCENT ON WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 15.59 per cent week on week to 2.76 million mt for ...
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- Sindya Power Generating Company Private Ltd
- Eastern Coal Council - USA
- Asmin Koalindo Tuhup - Indonesia
- India Bulls Power Limited - India
- Essar Steel Hazira Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Orica Mining Services - Indonesia
- Bharathi Cement Corporation - India
- Coastal Gujarat Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- MS Steel International - UAE
- Parry Sugars Refinery, India
- Iligan Light & Power Inc, Philippines
- Thai Mozambique Logistica
- Singapore Mercantile Exchange
- Bhushan Steel Limited - India
- Mintek Dendrill Indonesia
- Formosa Plastics Group - Taiwan
- Thiess Contractors Indonesia
- Mercuria Energy - Indonesia
- Romanian Commodities Exchange
- Global Business Power Corporation, Philippines
- ICICI Bank Limited - India
- London Commodity Brokers - England
- Deloitte Consulting - India
- Straits Asia Resources Limited - Singapore
- PNOC Exploration Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Tamil Nadu electricity Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IEA Clean Coal Centre - UK
- Australian Commodity Traders Exchange
- Sree Jayajothi Cements Limited - India
- Videocon Industries ltd - India
- Latin American Coal - Colombia
- Indonesian Coal Mining Association
- Heidelberg Cement - Germany
- The Treasury - Australian Government
- Directorate Of Revenue Intelligence - India
- Global Coal Blending Company Limited - Australia
- Banpu Public Company Limited - Thailand
- Kobexindo Tractors - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Coal and Oil Company - UAE
- Port Waratah Coal Services - Australia
- Chettinad Cement Corporation Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- VISA Power Limited - India
- Goldman Sachs - Singapore
- Bulk Trading Sa - Switzerland
- GVK Power & Infra Limited - India
- Semirara Mining and Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Mjunction Services Limited - India
- McConnell Dowell - Australia
- Dalmia Cement Bharat India
- Vijayanagar Sugar Pvt Ltd - India
- Central Java Power - Indonesia
- Agrawal Coal Company - India
- Binh Thuan Hamico - Vietnam
- Wilmar Investment Holdings
- Bangladesh Power Developement Board
- Antam Resourcindo - Indonesia
- Indo Tambangraya Megah - Indonesia
- Sical Logistics Limited - India
- Star Paper Mills Limited - India
- Meenaskhi Energy Private Limited - India
- Therma Luzon, Inc, Philippines
- Borneo Indobara - Indonesia
- IHS Mccloskey Coal Group - USA
- Ministry of Transport, Egypt
- European Bulk Services B.V. - Netherlands
- Kapuas Tunggal Persada - Indonesia
- Global Green Power PLC Corporation, Philippines
- Orica Australia Pty. Ltd.
- Savvy Resources Ltd - HongKong
- Maheswari Brothers Coal Limited - India
- Bhatia International Limited - India
- Renaissance Capital - South Africa
- Jaiprakash Power Ventures ltd
- Maharashtra Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karbindo Abesyapradhi - Indoneisa
- Australian Coal Association
- Planning Commission, India
- Barasentosa Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Rio Tinto Coal - Australia
- Gujarat Sidhee Cement - India
- Kepco SPC Power Corporation, Philippines
- Attock Cement Pakistan Limited
- TeaM Sual Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- Bukit Makmur.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Georgia Ports Authority, United States
- Sarangani Energy Corporation, Philippines
- South Luzon Thermal Energy Corporation
- LBH Netherlands Bv - Netherlands
- Malabar Cements Ltd - India
- Power Finance Corporation Ltd., India
- Commonwealth Bank - Australia
- Larsen & Toubro Limited - India
- Metalloyd Limited - United Kingdom
- Sakthi Sugars Limited - India
- Standard Chartered Bank - UAE
- Miang Besar Coal Terminal - Indonesia
- Altura Mining Limited, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement PLC, Thailand
- New Zealand Coal & Carbon
- Intertek Mineral Services - Indonesia
- Salva Resources Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Baramulti Group, Indonesia
- Electricity Authority, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Grasim Industreis Ltd - India
- SN Aboitiz Power Inc, Philippines
- Vedanta Resources Plc - India
- CIMB Investment Bank - Malaysia
- AsiaOL BioFuels Corp., Philippines
- Anglo American - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Carbofer General Trading SA - India
- PTC India Limited - India
- Kaltim Prima Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- OPG Power Generation Pvt Ltd - India
- Independent Power Producers Association of India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Madhucon Powers Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Lanco Infratech Ltd - India
- Interocean Group of Companies - India
- Bhoruka Overseas - Indonesia
- Coalindo Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- SMG Consultants - Indonesia
- Trasteel International SA, Italy
- GN Power Mariveles Coal Plant, Philippines
- Price Waterhouse Coopers - Russia
- Petrochimia International Co. Ltd.- Taiwan
- PowerSource Philippines DevCo
- Vizag Seaport Private Limited - India
- Meralco Power Generation, Philippines
- Siam City Cement - Thailand
- The University of Queensland
- Sojitz Corporation - Japan
- International Coal Ventures Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- White Energy Company Limited
- Riau Bara Harum - Indonesia
- Parliament of New Zealand
- CNBM International Corporation - China
- Indogreen Group - Indonesia
- Indian Energy Exchange, India
- Chamber of Mines of South Africa
- Merrill Lynch Commodities Europe
- Petron Corporation, Philippines
- Tata Chemicals Ltd - India
- Eastern Energy - Thailand
- Samtan Co., Ltd - South Korea
- Alfred C Toepfer International GmbH - Germany
- Ministry of Mines - Canada
- Toyota Tsusho Corporation, Japan
- Central Electricity Authority - India
- Aboitiz Power Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Medco Energi Mining Internasional
- Timah Investasi Mineral - Indoneisa
- Africa Commodities Group - South Africa
- Wood Mackenzie - Singapore
- Edison Trading Spa - Italy
- Globalindo Alam Lestari - Indonesia
- Minerals Council of Australia
- Energy Link Ltd, New Zealand
- Economic Council, Georgia
- Indika Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Offshore Bulk Terminal Pte Ltd, Singapore
- Uttam Galva Steels Limited - India
- Ministry of Finance - Indonesia
- Karaikal Port Pvt Ltd - India
- ASAPP Information Group - India
- Kalimantan Lumbung Energi - Indonesia
- The State Trading Corporation of India Ltd
- Billiton Holdings Pty Ltd - Australia
- SMC Global Power, Philippines
- Oldendorff Carriers - Singapore
- Leighton Contractors Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Mercator Lines Limited - India
- Kumho Petrochemical, South Korea
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining Corp, Philippines
- Xindia Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Aditya Birla Group - India
- GMR Energy Limited - India
- Ambuja Cements Ltd - India
- Energy Development Corp, Philippines
- San Jose City I Power Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Marubeni Corporation - India
- Indian Oil Corporation Limited
- Pendopo Energi Batubara - Indonesia
- Cement Manufacturers Association - India
- Ind-Barath Power Infra Limited - India
- Posco Energy - South Korea
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