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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, 14 April 16
AUSTRALIAN MINING SERVICES SECTOR SQUEEZED BY MINERS' COST CUTS - FITCH RATINGS
Fitch Ratings says mining services companies' revenues and margins will remain under pressure as miners continue to focus on reducing costs ami ...
Thursday, 14 April 16
DRY BULKERS' PRICES COULD BE HEADING UPWARDS AS BUYERS' APPETITE INCREASES - HELLENIC SHIPPING NEWS
Investment sentiment is beginning to trend upwards in the market for second hand dry bulk carriers. According to the latest weekly report from ship ...
Wednesday, 13 April 16
U.S COAL PRODUCTION IS EXPECTED TO DECREASE BY 16 PER CENT IN 2016; THE LARGEST ANNUAL PERCENTAGE DECLINE SINCE 1958 - EIA
EIA estimates that U.S. coal production in March 2016 was 52 million short tons (MMst), a 2 MMst (4%) decrease from the previous month and 29 MMst ...
Tuesday, 12 April 16
INDONESIA COAL BENCHMARK PRICE INCREASES FOR SECOND STRAIGHT MONTH
COALspot.com: The Indonesia Coal Benchmark Price Increases For Second Straight Month in April 2016.
The Director General of Mine ...
Tuesday, 12 April 16
NO FURTHER SIGNIFICANT COAL PRICE DECLINES IN THE FUTURE - FITCH
COALspot.com: Fitch does not expect further significant coal price declines because producers sector-wide are suffering losses while China and Indo ...
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- PNOC Exploration Corporation - Philippines
- Indonesian Coal Mining Association
- Australian Coal Association
- Dalmia Cement Bharat India
- White Energy Company Limited
- PTC India Limited - India
- Kaltim Prima Coal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Global Business Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Kumho Petrochemical, South Korea
- GVK Power & Infra Limited - India
- Thiess Contractors Indonesia
- Economic Council, Georgia
- South Luzon Thermal Energy Corporation
- Mjunction Services Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Oil Corporation Limited
- Sojitz Corporation - Japan
- Central Java Power - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bayan Resources Tbk. - Indonesia
- Ambuja Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- Global Green Power PLC Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Toyota Tsusho Corporation, Japan
- Vedanta Resources Plc - India
- Coal and Oil Company - UAE
- Oldendorff Carriers - Singapore
- Standard Chartered Bank - UAE
- Orica Mining Services - Indonesia
- MS Steel International - UAE
- International Coal Ventures Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Parliament of New Zealand
- The State Trading Corporation of India Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Deloitte Consulting - India
- OPG Power Generation Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Videocon Industries ltd - India
- IHS Mccloskey Coal Group - USA
- Banpu Public Company Limited - Thailand
- Interocean Group of Companies - India
- Directorate Of Revenue Intelligence - India
- Agrawal Coal Company - India
- Renaissance Capital - South Africa
- Central Electricity Authority - India
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
- Australian Commodity Traders Exchange
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Transport, Egypt
- Altura Mining Limited, Indonesia
- Marubeni Corporation - India
- Bukit Baiduri Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Trasteel International SA, Italy
- Romanian Commodities Exchange
- Holcim Trading Pte Ltd - Singapore
- TeaM Sual Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Ind-Barath Power Infra Limited - India
- Intertek Mineral Services - Indonesia
- Kideco Jaya Agung - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- IEA Clean Coal Centre - UK
- Petron Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Barasentosa Lestari - Indonesia
- Iligan Light & Power Inc, Philippines
- Indogreen Group - Indonesia
- Africa Commodities Group - South Africa
- Ministry of Mines - Canada
- Pipit Mutiara Jaya. PT, Indonesia
- Thai Mozambique Logistica
- Sinarmas Energy and Mining - Indonesia
- Rio Tinto Coal - Australia
- AsiaOL BioFuels Corp., Philippines
- Baramulti Group, Indonesia
- Indika Energy - Indonesia
- Siam City Cement PLC, Thailand
- CIMB Investment Bank - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Singapore Mercantile Exchange
- Lanco Infratech Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Riau Bara Harum - Indonesia
- Chettinad Cement Corporation Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Electricity Authority, New Zealand
- Merrill Lynch Commodities Europe
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kepco SPC Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Sree Jayajothi Cements Limited - India
- ICICI Bank Limited - India
- Uttam Galva Steels Limited - India
- Mercator Lines Limited - India
- Wilmar Investment Holdings
- Bhushan Steel Limited - India
- Georgia Ports Authority, United States
- GN Power Mariveles Coal Plant, Philippines
- Essar Steel Hazira Ltd - India
- Meralco Power Generation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Simpson Spence & Young - Indonesia
- The University of Queensland
- Bangladesh Power Developement Board
- Kartika Selabumi Mining - Indonesia
- Independent Power Producers Association of India
- Orica Australia Pty. Ltd.
- Larsen & Toubro Limited - India
- Eastern Energy - Thailand
- Star Paper Mills Limited - India
- Energy Link Ltd, New Zealand
- Bhatia International Limited - India
- Sindya Power Generating Company Private Ltd
- Cement Manufacturers Association - India
- Port Waratah Coal Services - Australia
- Parry Sugars Refinery, India
- Edison Trading Spa - Italy
- Formosa Plastics Group - Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- New Zealand Coal & Carbon
- Sakthi Sugars Limited - India
- Bukit Makmur.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- Indian Energy Exchange, India
- PowerSource Philippines DevCo
- Tata Chemicals Ltd - India
- Semirara Mining Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Mintek Dendrill Indonesia
- Bhoruka Overseas - Indonesia
- Planning Commission, India
- Borneo Indobara - Indonesia
- ASAPP Information Group - India
- Sical Logistics Limited - India
- VISA Power Limited - India
- Commonwealth Bank - Australia
- Coalindo Energy - Indonesia
- Electricity Generating Authority of Thailand
- Timah Investasi Mineral - Indoneisa
- Vizag Seaport Private Limited - India
- Antam Resourcindo - Indonesia
- GMR Energy Limited - India
- Sarangani Energy Corporation, Philippines
- Jindal Steel & Power Ltd - India
- SMG Consultants - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bulk Trading Sa - Switzerland
- Eastern Coal Council - USA
- Power Finance Corporation Ltd., India
- Bharathi Cement Corporation - India
- Madhucon Powers Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Savvy Resources Ltd - HongKong
- Xindia Steels Limited - India
- Heidelberg Cement - Germany
- Salva Resources Pvt Ltd - India
- Energy Development Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Mercuria Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Wood Mackenzie - Singapore
- Malabar Cements Ltd - India
- Latin American Coal - Colombia
- Ceylon Electricity Board - Sri Lanka
- Anglo American - United Kingdom
- Makarim & Taira - Indonesia
- McConnell Dowell - Australia
- CNBM International Corporation - China
- Jorong Barutama Greston.PT - Indonesia
- The Treasury - Australian Government
- Minerals Council of Australia
- Petrochimia International Co. Ltd.- Taiwan
- Aditya Birla Group - India
- Meenaskhi Energy Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- India Bulls Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Kohat Cement Company Ltd. - Pakistan
- Posco Energy - South Korea
- Tamil Nadu electricity Board
- Attock Cement Pakistan Limited
- SMC Global Power, Philippines
- Medco Energi Mining Internasional
- Kobexindo Tractors - Indoneisa
- Samtan Co., Ltd - South Korea
- Goldman Sachs - Singapore
- London Commodity Brokers - England
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement - Thailand
- Grasim Industreis Ltd - India
- Carbofer General Trading SA - India
- European Bulk Services B.V. - Netherlands
- Price Waterhouse Coopers - Russia
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Sidhee Cement - India
- SN Aboitiz Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Coastal Gujarat Power Limited - India
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