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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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Sunday, 18 August 13
INDO - INDIA FREIGHT EXPECTED TO BE FIRM NEXT WEEK - VISTAAR
COALspot.com - The freight market was up this week with the BDI gaining more than 10 pct due to strong Cape Sector.
The BDI was closed at 1,102 p ...
Friday, 16 August 13
US COAL PRODUCTION SLIGHTLY UP ON WEEK
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.10 million short tons (mmst) of ...
Thursday, 15 August 13
CAPESIZE : TRENDS SOMETIMES SHIFT WITH NO PRIOR WARNING - FEARNRESEARCH
Handy
The influence of the summer holidays across Europe was felt in the Atlantic basin this week. Very little activity and a growing list of avail ...
Wednesday, 14 August 13
ANOTHER WEEK IN THE RED FOR DRY BULK CARRIERS - INTERMODAL
Chartering (Wet: Stable- / Dry: Stable- )
Another week in the red for Dry Bulk carriers with the market losing further steam as fewer an ...
Tuesday, 13 August 13
AUSTRALIA NEWCASTLE COAL EXPORTS JUMP 30.61 PERCENT ON WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 30.61 per cent week on week to 2.95 million mt for ...
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- Directorate Of Revenue Intelligence - India
- Orica Mining Services - Indonesia
- Sarangani Energy Corporation, Philippines
- Anglo American - United Kingdom
- Goldman Sachs - Singapore
- Power Finance Corporation Ltd., India
- Global Coal Blending Company Limited - Australia
- Miang Besar Coal Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coastal Gujarat Power Limited - India
- Malabar Cements Ltd - India
- Intertek Mineral Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Iligan Light & Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Deloitte Consulting - India
- Mintek Dendrill Indonesia
- Global Business Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- SMG Consultants - Indonesia
- SN Aboitiz Power Inc, Philippines
- London Commodity Brokers - England
- Samtan Co., Ltd - South Korea
- Lanco Infratech Ltd - India
- Latin American Coal - Colombia
- Bharathi Cement Corporation - India
- McConnell Dowell - Australia
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Salva Resources Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Savvy Resources Ltd - HongKong
- Orica Australia Pty. Ltd.
- Aboitiz Power Corporation - Philippines
- Africa Commodities Group - South Africa
- Electricity Generating Authority of Thailand
- Petron Corporation, Philippines
- Central Electricity Authority - India
- Asmin Koalindo Tuhup - Indonesia
- Sree Jayajothi Cements Limited - India
- Wood Mackenzie - Singapore
- Kepco SPC Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Mjunction Services Limited - India
- Altura Mining Limited, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Wilmar Investment Holdings
- Binh Thuan Hamico - Vietnam
- Trasteel International SA, Italy
- Cement Manufacturers Association - India
- Attock Cement Pakistan Limited
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- Parliament of New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Baramulti Group, Indonesia
- Carbofer General Trading SA - India
- South Luzon Thermal Energy Corporation
- Tata Chemicals Ltd - India
- Thai Mozambique Logistica
- Kapuas Tunggal Persada - Indonesia
- Formosa Plastics Group - Taiwan
- Thiess Contractors Indonesia
- Makarim & Taira - Indonesia
- Bangladesh Power Developement Board
- Petrochimia International Co. Ltd.- Taiwan
- Riau Bara Harum - Indonesia
- Banpu Public Company Limited - Thailand
- Sakthi Sugars Limited - India
- Mercator Lines Limited - India
- AsiaOL BioFuels Corp., Philippines
- Karaikal Port Pvt Ltd - India
- ICICI Bank Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Kideco Jaya Agung - Indonesia
- Georgia Ports Authority, United States
- Ministry of Transport, Egypt
- Port Waratah Coal Services - Australia
- Energy Development Corp, Philippines
- The University of Queensland
- Bhatia International Limited - India
- Australian Coal Association
- Bhushan Steel Limited - India
- Meenaskhi Energy Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement PLC, Thailand
- Electricity Authority, New Zealand
- Sindya Power Generating Company Private Ltd
- Posco Energy - South Korea
- Parry Sugars Refinery, India
- Directorate General of MIneral and Coal - Indonesia
- The Treasury - Australian Government
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
- Tamil Nadu electricity Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pendopo Energi Batubara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Semirara Mining Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Oldendorff Carriers - Singapore
- India Bulls Power Limited - India
- Central Java Power - Indonesia
- Standard Chartered Bank - UAE
- Bhoruka Overseas - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- GMR Energy Limited - India
- Jaiprakash Power Ventures ltd
- Bulk Trading Sa - Switzerland
- Timah Investasi Mineral - Indoneisa
- Independent Power Producers Association of India
- Planning Commission, India
- Sojitz Corporation - Japan
- Renaissance Capital - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Uttam Galva Steels Limited - India
- Australian Commodity Traders Exchange
- Ind-Barath Power Infra Limited - India
- Jindal Steel & Power Ltd - India
- Mercuria Energy - Indonesia
- Commonwealth Bank - Australia
- Straits Asia Resources Limited - Singapore
- Ministry of Finance - Indonesia
- Minerals Council of Australia
- Economic Council, Georgia
- Rashtriya Ispat Nigam Limited - India
- Toyota Tsusho Corporation, Japan
- Simpson Spence & Young - Indonesia
- ASAPP Information Group - India
- European Bulk Services B.V. - Netherlands
- Edison Trading Spa - Italy
- Essar Steel Hazira Ltd - India
- Bayan Resources Tbk. - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Marubeni Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Singapore Mercantile Exchange
- Medco Energi Mining Internasional
- Coalindo Energy - Indonesia
- GVK Power & Infra Limited - India
- Gujarat Mineral Development Corp Ltd - India
- LBH Netherlands Bv - Netherlands
- Madhucon Powers Ltd - India
- Interocean Group of Companies - India
- Energy Link Ltd, New Zealand
- Dalmia Cement Bharat India
- San Jose City I Power Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Sinarmas Energy and Mining - Indonesia
- Grasim Industreis Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- CNBM International Corporation - China
- White Energy Company Limited
- Price Waterhouse Coopers - Russia
- Jorong Barutama Greston.PT - Indonesia
- Borneo Indobara - Indonesia
- Ministry of Mines - Canada
- Meralco Power Generation, Philippines
- Larsen & Toubro Limited - India
- Krishnapatnam Port Company Ltd. - India
- Globalindo Alam Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Star Paper Mills Limited - India
- Indian Energy Exchange, India
- Heidelberg Cement - Germany
- Kohat Cement Company Ltd. - Pakistan
- Kartika Selabumi Mining - Indonesia
- PTC India Limited - India
- Ambuja Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Agrawal Coal Company - India
- Kobexindo Tractors - Indoneisa
- CIMB Investment Bank - Malaysia
- Eastern Energy - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Rio Tinto Coal - Australia
- New Zealand Coal & Carbon
- MS Steel International - UAE
- Billiton Holdings Pty Ltd - Australia
- Indogreen Group - Indonesia
- Eastern Coal Council - USA
- OPG Power Generation Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Indika Energy - Indonesia
- Vizag Seaport Private Limited - India
- Vedanta Resources Plc - India
- Chamber of Mines of South Africa
- PowerSource Philippines DevCo
- Indonesian Coal Mining Association
- Videocon Industries ltd - India
- Cigading International Bulk Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Merrill Lynch Commodities Europe
- Kumho Petrochemical, South Korea
- Antam Resourcindo - Indonesia
- VISA Power Limited - India
- Aditya Birla Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- The State Trading Corporation of India Ltd
- Xindia Steels Limited - India
- Indian Oil Corporation Limited
- Neyveli Lignite Corporation Ltd, - India
- Sical Logistics Limited - India
- PNOC Exploration Corporation - Philippines
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