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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, 21 August 13
DRY BULK SHIPPING - POSITIVE WINDOW FOR CAPESIZE OWNERS - PETER SAND
By: Peter Sand, Chief Shipping Analyst, BIMCO
Demand:
“Expect the unexpected from the dry bulk market” was what we wrote last time ar ...
Wednesday, 21 August 13
RATES FOR CAPES MOVED DECISIVELY NORTH THIS WEEK - INTERMODAL
COALspot.com - Right when the BDI seemed ready for another dive below the 1000 points level, the Dry Bulk market made significant comeback this week ...
Tuesday, 20 August 13
AUSTRALIA NEWCASTLE COAL EXPORTS FALL 19.15 PERCENT ON WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port fell 19.15 per cent week on week to 2.39 million mt f ...
Tuesday, 20 August 13
CAPESIZE RATES MORE SENSITIVE TO DEMAND - COMMODORE RESEARCH & CONSULTANCY
COALspot.com : Approximately 71.50 million tons of iron ore is now stockpiled at Chinese ports, 900,000 tons (-1%) less than a week ago, Commodore R ...
Sunday, 18 August 13
SUB-BIT FOB INDONESIA COAL SWAP : ON POSITIVE DIRECTION ON DAY, WEEK AND MONTH
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average Q4 2013 delivery US$ 1.83 up month on month. The swap was moved positive ...
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- Altura Mining Limited, Indonesia
- Edison Trading Spa - Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Thiess Contractors Indonesia
- Chamber of Mines of South Africa
- Gujarat Mineral Development Corp Ltd - India
- MS Steel International - UAE
- Salva Resources Pvt Ltd - India
- Latin American Coal - Colombia
- Siam City Cement - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- London Commodity Brokers - England
- Sree Jayajothi Cements Limited - India
- Vedanta Resources Plc - India
- Posco Energy - South Korea
- Indo Tambangraya Megah - Indonesia
- Kaltim Prima Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Vizag Seaport Private Limited - India
- Banpu Public Company Limited - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Larsen & Toubro Limited - India
- LBH Netherlands Bv - Netherlands
- Savvy Resources Ltd - HongKong
- Kideco Jaya Agung - Indonesia
- Pendopo Energi Batubara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Borneo Indobara - Indonesia
- Interocean Group of Companies - India
- Africa Commodities Group - South Africa
- White Energy Company Limited
- Thai Mozambique Logistica
- Eastern Energy - Thailand
- Central Electricity Authority - India
- Parry Sugars Refinery, India
- Bulk Trading Sa - Switzerland
- Kalimantan Lumbung Energi - Indonesia
- Videocon Industries ltd - India
- PowerSource Philippines DevCo
- Meenaskhi Energy Private Limited - India
- Ministry of Finance - Indonesia
- Bukit Makmur.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Xindia Steels Limited - India
- Parliament of New Zealand
- Central Java Power - Indonesia
- Merrill Lynch Commodities Europe
- GVK Power & Infra Limited - India
- Energy Link Ltd, New Zealand
- Bayan Resources Tbk. - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Eastern Coal Council - USA
- Leighton Contractors Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Renaissance Capital - South Africa
- European Bulk Services B.V. - Netherlands
- San Jose City I Power Corp, Philippines
- Indonesian Coal Mining Association
- Binh Thuan Hamico - Vietnam
- ICICI Bank Limited - India
- Sojitz Corporation - Japan
- Ministry of Mines - Canada
- Tamil Nadu electricity Board
- Asmin Koalindo Tuhup - Indonesia
- OPG Power Generation Pvt Ltd - India
- Malabar Cements Ltd - India
- PTC India Limited - India
- Rio Tinto Coal - Australia
- Kohat Cement Company Ltd. - Pakistan
- Price Waterhouse Coopers - Russia
- Deloitte Consulting - India
- SMC Global Power, Philippines
- Cement Manufacturers Association - India
- International Coal Ventures Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Alfred C Toepfer International GmbH - Germany
- Uttam Galva Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Mjunction Services Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Baramulti Group, Indonesia
- Therma Luzon, Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Electricity Generating Authority of Thailand
- GMR Energy Limited - India
- Riau Bara Harum - Indonesia
- Planning Commission, India
- Antam Resourcindo - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Energy Development Corp, Philippines
- Bhoruka Overseas - Indonesia
- Ind-Barath Power Infra Limited - India
- CIMB Investment Bank - Malaysia
- Star Paper Mills Limited - India
- Minerals Council of Australia
- Anglo American - United Kingdom
- Sarangani Energy Corporation, Philippines
- McConnell Dowell - Australia
- Port Waratah Coal Services - Australia
- Grasim Industreis Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Directorate Of Revenue Intelligence - India
- Billiton Holdings Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate General of MIneral and Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Coastal Gujarat Power Limited - India
- Georgia Ports Authority, United States
- Sical Logistics Limited - India
- Global Business Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement PLC, Thailand
- Ministry of Transport, Egypt
- ASAPP Information Group - India
- Global Coal Blending Company Limited - Australia
- Jindal Steel & Power Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Semirara Mining and Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IEA Clean Coal Centre - UK
- TeaM Sual Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Oldendorff Carriers - Singapore
- Makarim & Taira - Indonesia
- Aditya Birla Group - India
- The Treasury - Australian Government
- Globalindo Alam Lestari - Indonesia
- Wilmar Investment Holdings
- TNB Fuel Sdn Bhd - Malaysia
- Ambuja Cements Ltd - India
- Semirara Mining Corp, Philippines
- Orica Australia Pty. Ltd.
- Medco Energi Mining Internasional
- SN Aboitiz Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Simpson Spence & Young - Indonesia
- Australian Coal Association
- PNOC Exploration Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Romanian Commodities Exchange
- VISA Power Limited - India
- Kobexindo Tractors - Indoneisa
- Independent Power Producers Association of India
- Kumho Petrochemical, South Korea
- Petron Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Timah Investasi Mineral - Indoneisa
- The University of Queensland
- Indogreen Group - Indonesia
- Global Green Power PLC Corporation, Philippines
- The State Trading Corporation of India Ltd
- Mercuria Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Essar Steel Hazira Ltd - India
- Toyota Tsusho Corporation, Japan
- Indika Energy - Indonesia
- Wood Mackenzie - Singapore
- Tata Chemicals Ltd - India
- CNBM International Corporation - China
- GAC Shipping (India) Pvt Ltd
- PetroVietnam Power Coal Import and Supply Company
- Singapore Mercantile Exchange
- Trasteel International SA, Italy
- Bhatia International Limited - India
- Lanco Infratech Ltd - India
- Agrawal Coal Company - India
- Commonwealth Bank - Australia
- India Bulls Power Limited - India
- Goldman Sachs - Singapore
- Straits Asia Resources Limited - Singapore
- Bangladesh Power Developement Board
- Madhucon Powers Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Meralco Power Generation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Pipit Mutiara Jaya. PT, Indonesia
- Metalloyd Limited - United Kingdom
- IHS Mccloskey Coal Group - USA
- Marubeni Corporation - India
- Bharathi Cement Corporation - India
- Standard Chartered Bank - UAE
- Dalmia Cement Bharat India
- SMG Consultants - Indonesia
- Aboitiz Power Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Australian Commodity Traders Exchange
- Miang Besar Coal Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Indian Energy Exchange, India
- Coal and Oil Company - UAE
- Economic Council, Georgia
- Barasentosa Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kepco SPC Power Corporation, Philippines
- Indian Oil Corporation Limited
- New Zealand Coal & Carbon
- Electricity Authority, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Heidelberg Cement - Germany
- Neyveli Lignite Corporation Ltd, - India
- Mintek Dendrill Indonesia
- Bhushan Steel Limited - India
- Attock Cement Pakistan Limited
- Carbofer General Trading SA - India
- Jaiprakash Power Ventures ltd
- Sakthi Sugars Limited - India
- Coalindo Energy - Indonesia
- Maheswari Brothers Coal Limited - India
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