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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, 18 April 16
SOUTH KOREA STATE-OWNED UTILITY KOMIPO INVITES COAL BIDS FOR BORYEONG POWER PLANT
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a new tender for 70,000 Metric Tons of 4,600 kcal/kg NAR coal for ...
Monday, 18 April 16
SOUTH AFRICA RB1 COAL HAS LOST GROUND IN INDIA; RB2 MAY LOSE GRIP IF THE PRICE CROSSES US$ 50 A TON - TRADERS
COALspot.com: Indian coal consumers preferred to buy South Africa RB2 coal instead of RB1 coal recent months due to RB2's low CFR price level. ...
Monday, 18 April 16
CAPESIZE INDEX ROSE 44.66 PER CENT WEEK OVER WEEK
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities continued to rose this week.
The freight market was ...
Friday, 15 April 16
PANAMAX MARKET CONTINUES TO FIRM - FEARNLEYS
Cape
It has been a positive freight market for the past few weeks, however, this week the market is taking a small breather, says Fearnleys in it ...
Friday, 15 April 16
U.S WEEKLY COAL OUTPUT FALLS ACROSS ALL BASINS - EIA
COALspot.com – U.S the world’s second largest coal producer has produced approximately totaled an estimated 10.2 million short tons (mm ...
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- SMC Global Power, Philippines
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- Commonwealth Bank - Australia
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- PNOC Exploration Corporation - Philippines
- SMG Consultants - Indonesia
- Posco Energy - South Korea
- Straits Asia Resources Limited - Singapore
- Central Java Power - Indonesia
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- Indogreen Group - Indonesia
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- Interocean Group of Companies - India
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- Sinarmas Energy and Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Billiton Holdings Pty Ltd - Australia
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- Sojitz Corporation - Japan
- Bharathi Cement Corporation - India
- CNBM International Corporation - China
- PTC India Limited - India
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- Minerals Council of Australia
- Australian Coal Association
- IEA Clean Coal Centre - UK
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Port Waratah Coal Services - Australia
- Asmin Koalindo Tuhup - Indonesia
- Mercator Lines Limited - India
- Planning Commission, India
- Karaikal Port Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Indonesian Coal Mining Association
- Coal and Oil Company - UAE
- Vedanta Resources Plc - India
- Pendopo Energi Batubara - Indonesia
- Ministry of Mines - Canada
- International Coal Ventures Pvt Ltd - India
- Merrill Lynch Commodities Europe
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- Wood Mackenzie - Singapore
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- ICICI Bank Limited - India
- Economic Council, Georgia
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- Central Electricity Authority - India
- Bank of Tokyo Mitsubishi UFJ Ltd
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- Oldendorff Carriers - Singapore
- Kartika Selabumi Mining - Indonesia
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- Antam Resourcindo - Indonesia
- TeaM Sual Corporation - Philippines
- Kumho Petrochemical, South Korea
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- Energy Link Ltd, New Zealand
- Global Business Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Iligan Light & Power Inc, Philippines
- VISA Power Limited - India
- Agrawal Coal Company - India
- Global Coal Blending Company Limited - Australia
- Singapore Mercantile Exchange
- Thiess Contractors Indonesia
- GAC Shipping (India) Pvt Ltd
- Jindal Steel & Power Ltd - India
- SN Aboitiz Power Inc, Philippines
- Orica Mining Services - Indonesia
- Coalindo Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kohat Cement Company Ltd. - Pakistan
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- Jorong Barutama Greston.PT - Indonesia
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- Parry Sugars Refinery, India
- The University of Queensland
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- Jaiprakash Power Ventures ltd
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- Bulk Trading Sa - Switzerland
- Borneo Indobara - Indonesia
- Metalloyd Limited - United Kingdom
- San Jose City I Power Corp, Philippines
- Cement Manufacturers Association - India
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- Gujarat Mineral Development Corp Ltd - India
- LBH Netherlands Bv - Netherlands
- Medco Energi Mining Internasional
- Uttam Galva Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Bangladesh Power Developement Board
- Larsen & Toubro Limited - India
- Indo Tambangraya Megah - Indonesia
- PowerSource Philippines DevCo
- Ministry of Finance - Indonesia
- Romanian Commodities Exchange
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- Petrochimia International Co. Ltd.- Taiwan
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- Eastern Energy - Thailand
- Salva Resources Pvt Ltd - India
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- Independent Power Producers Association of India
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- Semirara Mining Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Mintek Dendrill Indonesia
- Renaissance Capital - South Africa
- Bukit Makmur.PT - Indonesia
- GVK Power & Infra Limited - India
- Georgia Ports Authority, United States
- Gujarat Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- Alfred C Toepfer International GmbH - Germany
- Deloitte Consulting - India
- Petron Corporation, Philippines
- MS Steel International - UAE
- Attock Cement Pakistan Limited
- Africa Commodities Group - South Africa
- Xindia Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Krishnapatnam Port Company Ltd. - India
- Parliament of New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- OPG Power Generation Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Meenaskhi Energy Private Limited - India
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- Electricity Authority, New Zealand
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- Eastern Coal Council - USA
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