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Tuesday, 10 May 16
VOLATILITY? VARIATION NO ENIGMA TO SHIPPING..... - CLARKSONS
 Along with cyclicality, the other characteristic of the shipping markets which receives frequent mention is volatility. This is so evident that the shipping markets are often reported to be many times more volatile than the stock markets or other fluctuating economic variables. Here we take a look at some metrics which shine some light on the relative volatility of the industry.
Measuring The Waves
Many metrics can be used to measure aspects of volatility (though none are perfect). A few are calculated here to compare volatility in the shipping markets with that in the stock and commodity markets. One classic measure of volatility is the ‘coefficient of variation’ which takes the standard deviation of a series over time (a measure of the degree of dispersion of observations in a series) and divides it by the mean (average) level of the series.
Volatile Business
This metric highlights the degree of volatility present in the shipping markets (see graph). For the ClarkSea Index it stands at 50%, for VLCC spot earnings 73% and Capesize spot earnings 104%. For the FTSE-100 the figure stands at 29% and for the S&P 500 43%. The stock markets, often thought highly capricious, appear to be quite a bit less volatile than shipping on this basis (and given that stock markets generally track a trend rather than a cycle, one might have expected their coefficients to be biased upwards). The oil price compares more closely to shipping; the figure for Brent crude stands at 73%. Another useful metric is the average absolute monthly change as a percentage of the mean. For the ClarkSea Index this stands at 8%, for VLCC spot earnings at 26% and Capesize spot earnings 18%. For the FTSE-100 and S&P 500 this stands at around 3% and for Brent at around 6%, so again much lower.
Of course this analysis doesn’t capture everything. It excludes week-to-week (or day-to-day) volatility, though one might suppose that this could further emphasise shipping’s volatility (for example, see VLCC spot earnings on page 2). Equally it does not handle (or ‘de-trend’) indicators differently to account for the fact that stock markets typically follow a long-term trend, rather than a cycle like shipping.
Variation On A Theme?
But, even using a regression approach to ascertain variation from simple trend levels, over 60% of the FTSE-100 movement is explained by the trend. In shipping, much more of the variation appears to remain ‘unexplained’ (less than 10% of the variation of the ClarkSea Index would be accounted for by a simple trend).
Need Good Sea Legs?
So, volatility in shipping easily holds its own against fluctuations in other economic phenomena. It’s a competitive business, and rapid changes in pricing can be driven by the steepness of the supply curve at the margins, as well as a range of quite unpredictable factors. This helps make shipping interesting for asset players and short-term speculators but tricky for investors looking for certainty of return and analysts looking for a clear picture. Like seafarers themselves, shipping market players can quite rightly point to having the stomach for ups and downs as much as anyone.
Have a nice day.
Source: Clarksons
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Monday, 16 May 16
THE FREIGHT MARKET WAS WEAK AND ALL SEGMENTS EXCEPT PANAMAX WERE DOWN
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities decline this week.
The freight market was weak and a ...
Friday, 13 May 16
COAL CARGOES - SOME RECENT DEVELOPMENTS: SWEDISH CLUB
KNOWLEDGE TO ELEVATE
Indonesia continues to be amongst the world’s major exporters of coal, some 426Mt being traded in 2013 mostly to In ...
Friday, 13 May 16
US WEEKLY COAL PRODUCTION IS RUNNING 33% BELOW THE SAME PERIOD IN 2015 - EIA
COALspot.com – U.S the world’s second largest coal producer has produced approximately totaled an estimated 10.9 million short tons (mm ...
Friday, 13 May 16
DRY BULK SHIPPING MARKET RECOVERY WILL BE A LONG, HARD-FOUGHT BATTLE - HELLENIC SHIPPING NEWS
Anyone who expects a strong rally in dry bulk market rates to end the industry’s downturn will be bitterly disappointed. By contrast – ...
Wednesday, 11 May 16
U.S. FORECAST COAL PRODUCTION IS EXPECTED TO DECLINED BY 150 MMST IN 2016; THE LARGEST DECLINE SINCE 1949 - EIA
COALspot.com: EIA estimates that U.S. coal production in April was 46 million short tons (MMst), a 6 MMst (12%) decrease from the previous month an ...
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- Merrill Lynch Commodities Europe
- Indian Energy Exchange, India
- PTC India Limited - India
- Neyveli Lignite Corporation Ltd, - India
- San Jose City I Power Corp, Philippines
- Trasteel International SA, Italy
- Central Electricity Authority - India
- Medco Energi Mining Internasional
- GAC Shipping (India) Pvt Ltd
- Sinarmas Energy and Mining - Indonesia
- Bangladesh Power Developement Board
- Bulk Trading Sa - Switzerland
- Globalindo Alam Lestari - Indonesia
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- Bank of Tokyo Mitsubishi UFJ Ltd
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- TeaM Sual Corporation - Philippines
- Agrawal Coal Company - India
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- Meenaskhi Energy Private Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Madhucon Powers Ltd - India
- Cement Manufacturers Association - India
- Parry Sugars Refinery, India
- New Zealand Coal & Carbon
- Siam City Cement PLC, Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Eastern Energy - Thailand
- Eastern Coal Council - USA
- Malabar Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Sical Logistics Limited - India
- Energy Development Corp, Philippines
- Planning Commission, India
- Bhoruka Overseas - Indonesia
- Alfred C Toepfer International GmbH - Germany
- TNB Fuel Sdn Bhd - Malaysia
- Formosa Plastics Group - Taiwan
- Samtan Co., Ltd - South Korea
- Altura Mining Limited, Indonesia
- Standard Chartered Bank - UAE
- Pendopo Energi Batubara - Indonesia
- Sree Jayajothi Cements Limited - India
- Africa Commodities Group - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Indika Energy - Indonesia
- Xindia Steels Limited - India
- CNBM International Corporation - China
- Semirara Mining and Power Corporation, Philippines
- Latin American Coal - Colombia
- Electricity Authority, New Zealand
- Interocean Group of Companies - India
- Star Paper Mills Limited - India
- SN Aboitiz Power Inc, Philippines
- Larsen & Toubro Limited - India
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- Intertek Mineral Services - Indonesia
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- Baramulti Group, Indonesia
- Semirara Mining Corp, Philippines
- Singapore Mercantile Exchange
- Edison Trading Spa - Italy
- Karbindo Abesyapradhi - Indoneisa
- Bukit Makmur.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Savvy Resources Ltd - HongKong
- Bukit Asam (Persero) Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Chamber of Mines of South Africa
- Timah Investasi Mineral - Indoneisa
- CIMB Investment Bank - Malaysia
- Rashtriya Ispat Nigam Limited - India
- Meralco Power Generation, Philippines
- Tata Chemicals Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
- Gujarat Sidhee Cement - India
- GN Power Mariveles Coal Plant, Philippines
- Billiton Holdings Pty Ltd - Australia
- Grasim Industreis Ltd - India
- Kartika Selabumi Mining - Indonesia
- Coal and Oil Company - UAE
- India Bulls Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- GVK Power & Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- Sakthi Sugars Limited - India
- Marubeni Corporation - India
- Rio Tinto Coal - Australia
- Power Finance Corporation Ltd., India
- Australian Commodity Traders Exchange
- Kideco Jaya Agung - Indonesia
- London Commodity Brokers - England
- Indian Oil Corporation Limited
- Parliament of New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Posco Energy - South Korea
- Kumho Petrochemical, South Korea
- SMG Consultants - Indonesia
- Renaissance Capital - South Africa
- Australian Coal Association
- Dalmia Cement Bharat India
- Mjunction Services Limited - India
- European Bulk Services B.V. - Netherlands
- Deloitte Consulting - India
- Asmin Koalindo Tuhup - Indonesia
- LBH Netherlands Bv - Netherlands
- Orica Australia Pty. Ltd.
- Makarim & Taira - Indonesia
- White Energy Company Limited
- Chettinad Cement Corporation Ltd - India
- Electricity Generating Authority of Thailand
- Oldendorff Carriers - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wood Mackenzie - Singapore
- The Treasury - Australian Government
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- Wilmar Investment Holdings
- Straits Asia Resources Limited - Singapore
- Anglo American - United Kingdom
- Port Waratah Coal Services - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kaltim Prima Coal - Indonesia
- Mercuria Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Energy Link Ltd, New Zealand
- Salva Resources Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Banpu Public Company Limited - Thailand
- Indogreen Group - Indonesia
- Essar Steel Hazira Ltd - India
- Goldman Sachs - Singapore
- Global Business Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Holcim Trading Pte Ltd - Singapore
- IHS Mccloskey Coal Group - USA
- Karaikal Port Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Kapuas Tunggal Persada - Indonesia
- Videocon Industries ltd - India
- Toyota Tsusho Corporation, Japan
- ASAPP Information Group - India
- Orica Mining Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thai Mozambique Logistica
- Bayan Resources Tbk. - Indonesia
- Central Java Power - Indonesia
- Barasentosa Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Metalloyd Limited - United Kingdom
- Ministry of Finance - Indonesia
- SMC Global Power, Philippines
- Indonesian Coal Mining Association
- Heidelberg Cement - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- Cigading International Bulk Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Mines - Canada
- Bahari Cakrawala Sebuku - Indonesia
- Thiess Contractors Indonesia
- Tamil Nadu electricity Board
- Simpson Spence & Young - Indonesia
- VISA Power Limited - India
- Attock Cement Pakistan Limited
- Bukit Baiduri Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Independent Power Producers Association of India
- IEA Clean Coal Centre - UK
- Maheswari Brothers Coal Limited - India
- McConnell Dowell - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Ambuja Cements Ltd - India
- Bharathi Cement Corporation - India
- Georgia Ports Authority, United States
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Romanian Commodities Exchange
- Global Green Power PLC Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- The University of Queensland
- PNOC Exploration Corporation - Philippines
- Jaiprakash Power Ventures ltd
- Gujarat Mineral Development Corp Ltd - India
- GMR Energy Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Vizag Seaport Private Limited - India
- Lanco Infratech Ltd - India
- MS Steel International - UAE
- Sojitz Corporation - Japan
- Bhatia International Limited - India
- Kohat Cement Company Ltd. - Pakistan
- AsiaOL BioFuels Corp., Philippines
- Ministry of Transport, Egypt
- Economic Council, Georgia
- Mercator Lines Limited - India
- Borneo Indobara - Indonesia
- Carbofer General Trading SA - India
- Commonwealth Bank - Australia
- Petron Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Antam Resourcindo - Indonesia
- Minerals Council of Australia
- Uttam Galva Steels Limited - India
- ICICI Bank Limited - India
- Global Coal Blending Company Limited - Australia
- Mintek Dendrill Indonesia
- Jindal Steel & Power Ltd - India
- PowerSource Philippines DevCo
- Kobexindo Tractors - Indoneisa
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