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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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Tuesday, 26 April 16
INDONESIA BANNED COAL EXPORTS TO PHILIPPINES BY BARGES DUE TO SECURITY CONCERN
COALspot.com: The Ministry of Energy and Mineral Resources (ESDM) on behalf of the government of Indonesia has Freeze coal exports by barges to Phi ...
Tuesday, 26 April 16
NEWBUILDING DEMAND DOWN EVERYWHERE? - CLARKSONS
Newbuild activity provides one indication of an owner country’s likely future fleet growth, though secondhand sale and purchase and demolitio ...
Monday, 25 April 16
CHINESE STEEL PRICE SURGE NOT SUSTAINABLE - FITCH
The rapid increase in Chinese steel prices so far this year is not sustainable, as it is largely due to a seasonal pick-up in construction and elev ...
Monday, 25 April 16
WEEKLY CS (I) COAL INDICES END ALMOST FLAT
COALspot.com: Average 5000 GAR coal index of Indonesian origin up 0.05 percent week over week to averaging $38.67 per ton on this past Friday, acco ...
Monday, 25 April 16
BALTIC DRY INDEX ENDS WEEK ON A POSITIVE NOTE
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities continued to rose this week.
The freight market was ...
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- Bayan Resources Tbk. - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Toyota Tsusho Corporation, Japan
- Ambuja Cements Ltd - India
- Power Finance Corporation Ltd., India
- Jindal Steel & Power Ltd - India
- Bukit Baiduri Energy - Indonesia
- Commonwealth Bank - Australia
- Kaltim Prima Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Indian Oil Corporation Limited
- Global Green Power PLC Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Holcim Trading Pte Ltd - Singapore
- International Coal Ventures Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Singapore Mercantile Exchange
- Heidelberg Cement - Germany
- Medco Energi Mining Internasional
- Semirara Mining and Power Corporation, Philippines
- ASAPP Information Group - India
- San Jose City I Power Corp, Philippines
- Parliament of New Zealand
- Indika Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- McConnell Dowell - Australia
- CNBM International Corporation - China
- Meralco Power Generation, Philippines
- Merrill Lynch Commodities Europe
- Parry Sugars Refinery, India
- PetroVietnam Power Coal Import and Supply Company
- Videocon Industries ltd - India
- Carbofer General Trading SA - India
- Maharashtra Electricity Regulatory Commission - India
- Petron Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Billiton Holdings Pty Ltd - Australia
- India Bulls Power Limited - India
- Savvy Resources Ltd - HongKong
- Bank of Tokyo Mitsubishi UFJ Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Sakthi Sugars Limited - India
- Aditya Birla Group - India
- Price Waterhouse Coopers - Russia
- Marubeni Corporation - India
- Mintek Dendrill Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Central Electricity Authority - India
- Grasim Industreis Ltd - India
- Bangladesh Power Developement Board
- Trasteel International SA, Italy
- Wood Mackenzie - Singapore
- Siam City Cement - Thailand
- Rashtriya Ispat Nigam Limited - India
- Bhoruka Overseas - Indonesia
- Formosa Plastics Group - Taiwan
- Lanco Infratech Ltd - India
- Uttam Galva Steels Limited - India
- Standard Chartered Bank - UAE
- Renaissance Capital - South Africa
- Directorate General of MIneral and Coal - Indonesia
- Australian Commodity Traders Exchange
- SMG Consultants - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Coastal Gujarat Power Limited - India
- TeaM Sual Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- SMC Global Power, Philippines
- Kartika Selabumi Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bharathi Cement Corporation - India
- Edison Trading Spa - Italy
- Antam Resourcindo - Indonesia
- Ceylon Electricity Board - Sri Lanka
- OPG Power Generation Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Eastern Energy - Thailand
- Sinarmas Energy and Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- Orica Mining Services - Indonesia
- Indian Energy Exchange, India
- Salva Resources Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Vedanta Resources Plc - India
- Africa Commodities Group - South Africa
- Georgia Ports Authority, United States
- PTC India Limited - India
- IEA Clean Coal Centre - UK
- Dalmia Cement Bharat India
- Australian Coal Association
- Ministry of Mines - Canada
- Central Java Power - Indonesia
- Baramulti Group, Indonesia
- Agrawal Coal Company - India
- Therma Luzon, Inc, Philippines
- Indonesian Coal Mining Association
- Romanian Commodities Exchange
- Electricity Generating Authority of Thailand
- Intertek Mineral Services - Indonesia
- London Commodity Brokers - England
- PowerSource Philippines DevCo
- Aboitiz Power Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Xindia Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Coal Council - USA
- Wilmar Investment Holdings
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Kumho Petrochemical, South Korea
- Cement Manufacturers Association - India
- Economic Council, Georgia
- Coalindo Energy - Indonesia
- Port Waratah Coal Services - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Larsen & Toubro Limited - India
- Mjunction Services Limited - India
- The University of Queensland
- Attock Cement Pakistan Limited
- Kepco SPC Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Thai Mozambique Logistica
- Iligan Light & Power Inc, Philippines
- Barasentosa Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- Straits Asia Resources Limited - Singapore
- Chettinad Cement Corporation Ltd - India
- Mercator Lines Limited - India
- Altura Mining Limited, Indonesia
- Manunggal Multi Energi - Indonesia
- Rio Tinto Coal - Australia
- Electricity Authority, New Zealand
- GVK Power & Infra Limited - India
- VISA Power Limited - India
- South Luzon Thermal Energy Corporation
- The Treasury - Australian Government
- Indogreen Group - Indonesia
- Oldendorff Carriers - Singapore
- Coal and Oil Company - UAE
- Bulk Trading Sa - Switzerland
- Minerals Council of Australia
- Ind-Barath Power Infra Limited - India
- Posco Energy - South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- Globalindo Alam Lestari - Indonesia
- ICICI Bank Limited - India
- Makarim & Taira - Indonesia
- Interocean Group of Companies - India
- Deloitte Consulting - India
- Krishnapatnam Port Company Ltd. - India
- Tata Chemicals Ltd - India
- Metalloyd Limited - United Kingdom
- Timah Investasi Mineral - Indoneisa
- Madhucon Powers Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Sical Logistics Limited - India
- Siam City Cement PLC, Thailand
- Directorate Of Revenue Intelligence - India
- The State Trading Corporation of India Ltd
- Bhushan Steel Limited - India
- CIMB Investment Bank - Malaysia
- Bahari Cakrawala Sebuku - Indonesia
- Latin American Coal - Colombia
- Malabar Cements Ltd - India
- Vizag Seaport Private Limited - India
- Gujarat Sidhee Cement - India
- Karaikal Port Pvt Ltd - India
- Energy Development Corp, Philippines
- Thiess Contractors Indonesia
- Kapuas Tunggal Persada - Indonesia
- Planning Commission, India
- Orica Australia Pty. Ltd.
- Mercuria Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Ministry of Transport, Egypt
- Sojitz Corporation - Japan
- Kalimantan Lumbung Energi - Indonesia
- Bhatia International Limited - India
- Independent Power Producers Association of India
- Borneo Indobara - Indonesia
- Ministry of Finance - Indonesia
- Jaiprakash Power Ventures ltd
- Chamber of Mines of South Africa
- Semirara Mining Corp, Philippines
- New Zealand Coal & Carbon
- Star Paper Mills Limited - India
- Meenaskhi Energy Private Limited - India
- Simpson Spence & Young - Indonesia
- Riau Bara Harum - Indonesia
- Goldman Sachs - Singapore
- Maheswari Brothers Coal Limited - India
- Tamil Nadu electricity Board
- Energy Link Ltd, New Zealand
- MS Steel International - UAE
- GN Power Mariveles Coal Plant, Philippines
- Kideco Jaya Agung - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Global Business Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Binh Thuan Hamico - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- LBH Netherlands Bv - Netherlands
- SN Aboitiz Power Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Sarangani Energy Corporation, Philippines
- GMR Energy Limited - India
- White Energy Company Limited
- Essar Steel Hazira Ltd - India
- Banpu Public Company Limited - Thailand
- Anglo American - United Kingdom
- Samtan Co., Ltd - South Korea
- Sree Jayajothi Cements Limited - India
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