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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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Friday, 22 April 16
U.S WEEKLY DOMESTIC COAL OUTPUT UP 8.2 PER CENT - EIA
COALspot.com – U.S the world’s second largest coal producer has produced approximately totaled an estimated 11.1 million short tons (mm ...
Thursday, 21 April 16
PANAMAX: A VERY HEALTHY NORTH ATLANTIC FOR BOTH ROUNDS AND FRONTHAUL
Capesize
Correcting after last week's quadrupling.
This year's highest daily average of USD 8000 came on the back of substantial pro ...
Wednesday, 20 April 16
2017 IS EXPECTED TO BE A MUCH BETTER YEAR FOR THE SHIPPING INDUSTRY - INTERMODAL
Some months ago we noted that all projections anticipated 2016 to be a better year from a macroeconomic point of view when compared to 2015. As we ...
Tuesday, 19 April 16
STARS STILL SHINING? KEY IMPORTERS THROUGH THE TELESCOPE - CLARKSONS
As the pace of growth in Chinese seaborne imports has slowed, and prospects for a return to stronger rates of expansion appear to have diminished, ...
Monday, 18 April 16
INDONESIAN 5000 GAR COAL INDEX DECLINE 1.43 PERCENT WEEK OVER WEEK - CS (I) COAL INDEX
COALspot.com: Average 5000 GAR coal index of Indonesian origin fell 1.43 percent week over week to averaging $38.65 per ton on this past Friday, ac ...
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- Petrochimia International Co. Ltd.- Taiwan
- Attock Cement Pakistan Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Mineral Development Corp Ltd - India
- Merrill Lynch Commodities Europe
- Neyveli Lignite Corporation Ltd, - India
- Vedanta Resources Plc - India
- Latin American Coal - Colombia
- Electricity Generating Authority of Thailand
- Australian Commodity Traders Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Independent Power Producers Association of India
- Essar Steel Hazira Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Gujarat Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- Carbofer General Trading SA - India
- Orica Australia Pty. Ltd.
- VISA Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Coastal Gujarat Power Limited - India
- White Energy Company Limited
- Formosa Plastics Group - Taiwan
- Bulk Trading Sa - Switzerland
- Minerals Council of Australia
- Siam City Cement - Thailand
- Central Electricity Authority - India
- IEA Clean Coal Centre - UK
- Mercator Lines Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Miang Besar Coal Terminal - Indonesia
- Makarim & Taira - Indonesia
- Price Waterhouse Coopers - Russia
- SMC Global Power, Philippines
- Borneo Indobara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Economic Council, Georgia
- Riau Bara Harum - Indonesia
- Indonesian Coal Mining Association
- Ministry of Mines - Canada
- ICICI Bank Limited - India
- Larsen & Toubro Limited - India
- Africa Commodities Group - South Africa
- SN Aboitiz Power Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- Coalindo Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Transport, Egypt
- Kobexindo Tractors - Indoneisa
- Intertek Mineral Services - Indonesia
- Videocon Industries ltd - India
- Sical Logistics Limited - India
- Pendopo Energi Batubara - Indonesia
- Agrawal Coal Company - India
- Straits Asia Resources Limited - Singapore
- Globalindo Alam Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Parliament of New Zealand
- Malabar Cements Ltd - India
- South Luzon Thermal Energy Corporation
- Power Finance Corporation Ltd., India
- Global Business Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indogreen Group - Indonesia
- Uttam Galva Steels Limited - India
- Mintek Dendrill Indonesia
- Sarangani Energy Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Bharathi Cement Corporation - India
- Madhucon Powers Ltd - India
- Petron Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Bhatia International Limited - India
- Directorate Of Revenue Intelligence - India
- Krishnapatnam Port Company Ltd. - India
- European Bulk Services B.V. - Netherlands
- Indian Energy Exchange, India
- Therma Luzon, Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Bayan Resources Tbk. - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Baramulti Group, Indonesia
- Meralco Power Generation, Philippines
- Eastern Coal Council - USA
- Electricity Authority, New Zealand
- IHS Mccloskey Coal Group - USA
- Star Paper Mills Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Thiess Contractors Indonesia
- Manunggal Multi Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- AsiaOL BioFuels Corp., Philippines
- Cigading International Bulk Terminal - Indonesia
- Tamil Nadu electricity Board
- Chamber of Mines of South Africa
- CNBM International Corporation - China
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parry Sugars Refinery, India
- Global Green Power PLC Corporation, Philippines
- London Commodity Brokers - England
- Wilmar Investment Holdings
- Bukit Baiduri Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Thai Mozambique Logistica
- LBH Netherlands Bv - Netherlands
- Planning Commission, India
- Samtan Co., Ltd - South Korea
- Semirara Mining Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Romanian Commodities Exchange
- Dalmia Cement Bharat India
- Coal and Oil Company - UAE
- Energy Development Corp, Philippines
- Antam Resourcindo - Indonesia
- The Treasury - Australian Government
- Rashtriya Ispat Nigam Limited - India
- Orica Mining Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Deloitte Consulting - India
- Indo Tambangraya Megah - Indonesia
- Salva Resources Pvt Ltd - India
- Goldman Sachs - Singapore
- Eastern Energy - Thailand
- Medco Energi Mining Internasional
- Holcim Trading Pte Ltd - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- New Zealand Coal & Carbon
- San Jose City I Power Corp, Philippines
- Renaissance Capital - South Africa
- Singapore Mercantile Exchange
- Mercuria Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- SMG Consultants - Indonesia
- PowerSource Philippines DevCo
- Australian Coal Association
- Cement Manufacturers Association - India
- Savvy Resources Ltd - HongKong
- GAC Shipping (India) Pvt Ltd
- Vizag Seaport Private Limited - India
- Ambuja Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PTC India Limited - India
- Tata Chemicals Ltd - India
- ASAPP Information Group - India
- Rio Tinto Coal - Australia
- India Bulls Power Limited - India
- Karaikal Port Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Indian Oil Corporation Limited
- Ceylon Electricity Board - Sri Lanka
- Lanco Infratech Ltd - India
- Chettinad Cement Corporation Ltd - India
- Grasim Industreis Ltd - India
- Gujarat Sidhee Cement - India
- Jorong Barutama Greston.PT - Indonesia
- Oldendorff Carriers - Singapore
- Bhushan Steel Limited - India
- International Coal Ventures Pvt Ltd - India
- Sojitz Corporation - Japan
- Ind-Barath Power Infra Limited - India
- Georgia Ports Authority, United States
- McConnell Dowell - Australia
- Siam City Cement PLC, Thailand
- GVK Power & Infra Limited - India
- Energy Link Ltd, New Zealand
- Edison Trading Spa - Italy
- Metalloyd Limited - United Kingdom
- Kumho Petrochemical, South Korea
- The State Trading Corporation of India Ltd
- Kideco Jaya Agung - Indonesia
- Bangladesh Power Developement Board
- Pipit Mutiara Jaya. PT, Indonesia
- Aditya Birla Group - India
- Global Coal Blending Company Limited - Australia
- Interocean Group of Companies - India
- Simpson Spence & Young - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- MS Steel International - UAE
- CIMB Investment Bank - Malaysia
- Altura Mining Limited, Indonesia
- The University of Queensland
- Trasteel International SA, Italy
- Anglo American - United Kingdom
- Xindia Steels Limited - India
- Binh Thuan Hamico - Vietnam
- Port Waratah Coal Services - Australia
- Sindya Power Generating Company Private Ltd
- Aboitiz Power Corporation - Philippines
- Commonwealth Bank - Australia
- Standard Chartered Bank - UAE
- Mjunction Services Limited - India
- Posco Energy - South Korea
- GMR Energy Limited - India
- Sakthi Sugars Limited - India
- Kaltim Prima Coal - Indonesia
- Central Java Power - Indonesia
- Heidelberg Cement - Germany
- Leighton Contractors Pty Ltd - Australia
- Indika Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Ministry of Finance - Indonesia
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