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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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Thursday, 05 May 16
DRY BULK MARKET ON REVERSE MODE, AS HOLIDAYS AROUND THE WORLD HURT DEMAND - HELLENIC SHIPPING NEWS
The dry bulk market’s recent rally has been put on a temporary hold, as various holidays around the world have put a stop in it. In its lates ...
Wednesday, 04 May 16
COAL IMPORTS: A VOLATILE MATTER OR STILL POWERING DOWN? - CLARKSONS
Chinese coal imports decreased significantly in 2014-15, and so far in 2016 the pace of decline appears to have slowed, with imports even recording ...
Wednesday, 04 May 16
IS THE DRY BULK MARKET OUT OF THE WOODS YET, OR NOT? - HELLENIC SHIPPING NEWS
Things are beginning to brighten up in the beleaguered dry bulk market, which is riding on a multi-week rally to find itself around the “psyc ...
Wednesday, 04 May 16
POWER - WEEK: REAL EXAMPLES AND CASE STUDIES
POWER WEEK
7 - 11 November 2016, PARKROYAL on Beach Road Hotel, Singapore
www.power-week.com
Overview
Designed for the global e ...
Tuesday, 03 May 16
HOW TO AVOID THE LATEST CARGO FRAUDS - BIMCO
BIMCO receives regular reports from members around the world about cargo fraud. This week alone we have had two reports of cargoes being fixed (or ...
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- Antam Resourcindo - Indonesia
- Maheswari Brothers Coal Limited - India
- Global Business Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Bulk Trading Sa - Switzerland
- Gujarat Sidhee Cement - India
- Standard Chartered Bank - UAE
- Larsen & Toubro Limited - India
- LBH Netherlands Bv - Netherlands
- Interocean Group of Companies - India
- Coal and Oil Company - UAE
- Lanco Infratech Ltd - India
- European Bulk Services B.V. - Netherlands
- Vizag Seaport Private Limited - India
- Electricity Authority, New Zealand
- Heidelberg Cement - Germany
- Mjunction Services Limited - India
- Kideco Jaya Agung - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Chettinad Cement Corporation Ltd - India
- Commonwealth Bank - Australia
- Leighton Contractors Pty Ltd - Australia
- The Treasury - Australian Government
- Gujarat Mineral Development Corp Ltd - India
- MS Steel International - UAE
- Posco Energy - South Korea
- Bhoruka Overseas - Indonesia
- Jaiprakash Power Ventures ltd
- Mercuria Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Coalindo Energy - Indonesia
- Bangladesh Power Developement Board
- Videocon Industries ltd - India
- Indika Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sical Logistics Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Therma Luzon, Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Port Waratah Coal Services - Australia
- Iligan Light & Power Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Bukit Baiduri Energy - Indonesia
- Salva Resources Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- International Coal Ventures Pvt Ltd - India
- Petron Corporation, Philippines
- Ministry of Finance - Indonesia
- Dalmia Cement Bharat India
- Australian Coal Association
- Jorong Barutama Greston.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Jindal Steel & Power Ltd - India
- Wilmar Investment Holdings
- GMR Energy Limited - India
- Samtan Co., Ltd - South Korea
- New Zealand Coal & Carbon
- Electricity Generating Authority of Thailand
- GVK Power & Infra Limited - India
- ICICI Bank Limited - India
- PowerSource Philippines DevCo
- SMC Global Power, Philippines
- San Jose City I Power Corp, Philippines
- Vedanta Resources Plc - India
- Global Green Power PLC Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- London Commodity Brokers - England
- Independent Power Producers Association of India
- Australian Commodity Traders Exchange
- Indogreen Group - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Kumho Petrochemical, South Korea
- The University of Queensland
- CIMB Investment Bank - Malaysia
- Karaikal Port Pvt Ltd - India
- Indonesian Coal Mining Association
- SMG Consultants - Indonesia
- CNBM International Corporation - China
- Marubeni Corporation - India
- Sakthi Sugars Limited - India
- Kepco SPC Power Corporation, Philippines
- Thai Mozambique Logistica
- Timah Investasi Mineral - Indoneisa
- Latin American Coal - Colombia
- Baramulti Group, Indonesia
- Merrill Lynch Commodities Europe
- Vijayanagar Sugar Pvt Ltd - India
- Parliament of New Zealand
- Metalloyd Limited - United Kingdom
- Ambuja Cements Ltd - India
- Eastern Coal Council - USA
- Essar Steel Hazira Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Oldendorff Carriers - Singapore
- Mercator Lines Limited - India
- Price Waterhouse Coopers - Russia
- Orica Australia Pty. Ltd.
- SN Aboitiz Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Sojitz Corporation - Japan
- Formosa Plastics Group - Taiwan
- Agrawal Coal Company - India
- PNOC Exploration Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Orica Mining Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Aditya Birla Group - India
- Directorate General of MIneral and Coal - Indonesia
- White Energy Company Limited
- Directorate Of Revenue Intelligence - India
- Bukit Makmur.PT - Indonesia
- Chamber of Mines of South Africa
- Minerals Council of Australia
- Bahari Cakrawala Sebuku - Indonesia
- Coastal Gujarat Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- McConnell Dowell - Australia
- IHS Mccloskey Coal Group - USA
- Banpu Public Company Limited - Thailand
- Bayan Resources Tbk. - Indonesia
- Wood Mackenzie - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Xindia Steels Limited - India
- Rio Tinto Coal - Australia
- Makarim & Taira - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Transport, Egypt
- Globalindo Alam Lestari - Indonesia
- Africa Commodities Group - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Meralco Power Generation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining and Power Corporation, Philippines
- Cement Manufacturers Association - India
- Kobexindo Tractors - Indoneisa
- Malabar Cements Ltd - India
- PTC India Limited - India
- Toyota Tsusho Corporation, Japan
- Siam City Cement PLC, Thailand
- Madhucon Powers Ltd - India
- Medco Energi Mining Internasional
- Tata Chemicals Ltd - India
- Siam City Cement - Thailand
- Goldman Sachs - Singapore
- Bhushan Steel Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Attock Cement Pakistan Limited
- Mintek Dendrill Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- VISA Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Sree Jayajothi Cements Limited - India
- Ministry of Mines - Canada
- TNB Fuel Sdn Bhd - Malaysia
- OPG Power Generation Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Manunggal Multi Energi - Indonesia
- Carbofer General Trading SA - India
- Power Finance Corporation Ltd., India
- AsiaOL BioFuels Corp., Philippines
- India Bulls Power Limited - India
- Trasteel International SA, Italy
- Sindya Power Generating Company Private Ltd
- Simpson Spence & Young - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Straits Asia Resources Limited - Singapore
- Tamil Nadu electricity Board
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Anglo American - United Kingdom
- Planning Commission, India
- Energy Development Corp, Philippines
- Uttam Galva Steels Limited - India
- Riau Bara Harum - Indonesia
- Edison Trading Spa - Italy
- Renaissance Capital - South Africa
- Georgia Ports Authority, United States
- Intertek Mineral Services - Indonesia
- Singapore Mercantile Exchange
- TeaM Sual Corporation - Philippines
- Central Java Power - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parry Sugars Refinery, India
- Altura Mining Limited, Indonesia
- Deloitte Consulting - India
- Grasim Industreis Ltd - India
- Borneo Indobara - Indonesia
- Pendopo Energi Batubara - Indonesia
- Indian Energy Exchange, India
- Ind-Barath Power Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- The State Trading Corporation of India Ltd
- Bharathi Cement Corporation - India
- Indian Oil Corporation Limited
- Economic Council, Georgia
- Meenaskhi Energy Private Limited - India
- Central Electricity Authority - India
- South Luzon Thermal Energy Corporation
- Cigading International Bulk Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Energy Link Ltd, New Zealand
- Bhatia International Limited - India
- Kartika Selabumi Mining - Indonesia
- ASAPP Information Group - India
- Kalimantan Lumbung Energi - Indonesia
- Star Paper Mills Limited - India
- Romanian Commodities Exchange
- Eastern Energy - Thailand
- Aboitiz Power Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Thiess Contractors Indonesia
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