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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, 11 April 16
ON THE TIGHTROPE, IT CAN BE HARD TO KEEP YOUR BALANCE.... - CLARKSONS
Today’s headlines often point towards the impact of the demand side on the state of health of the shipping markets. But despite the fact that ...
Monday, 11 April 16
WEEKLY CS (I) COAL INDEX FOR 5700 GAR COAL UP 0.03 CENTS, OR ABOUT 0.06 PERCENT, TO $48.21 A TON
COALspot.com: Average 5000 GAR coal index of Indonesian origin fell 0.15 percent week over week to averaging $38.82 per ton on this past Friday, ac ...
Monday, 11 April 16
COAL IS NOT THE ENEMY TO FIGHT - ANDREA CLAVARINO, ASSOCARBONI
COALspot.com: “Coal is not the enemy to fight and electricity production from coal has an environmental impact in its lifecycle similar to na ...
Monday, 11 April 16
FORTY INDIAN COAL IMPORTERS UNDER THE DRI SCANNER FOR OVER-INVOICING : HINDU BUSINESS LINE
The Finance Ministry and the Directorate of Revenue Intelligence (DRI) of India are said to have stepped up investigations into the alleged over-in ...
Monday, 11 April 16
BDI ROSE TO ITS HIGHEST LEVEL IN FOUR MONTHS
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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- Malabar Cements Ltd - India
- Directorate Of Revenue Intelligence - India
- Meralco Power Generation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Oldendorff Carriers - Singapore
- Sindya Power Generating Company Private Ltd
- Medco Energi Mining Internasional
- Binh Thuan Hamico - Vietnam
- The University of Queensland
- Toyota Tsusho Corporation, Japan
- Australian Commodity Traders Exchange
- Africa Commodities Group - South Africa
- Timah Investasi Mineral - Indoneisa
- South Luzon Thermal Energy Corporation
- Alfred C Toepfer International GmbH - Germany
- Wilmar Investment Holdings
- Sarangani Energy Corporation, Philippines
- Eastern Coal Council - USA
- Kumho Petrochemical, South Korea
- International Coal Ventures Pvt Ltd - India
- Orica Mining Services - Indonesia
- Goldman Sachs - Singapore
- Jaiprakash Power Ventures ltd
- SMC Global Power, Philippines
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- Electricity Authority, New Zealand
- Uttam Galva Steels Limited - India
- CNBM International Corporation - China
- Energy Development Corp, Philippines
- ICICI Bank Limited - India
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- Thai Mozambique Logistica
- Orica Australia Pty. Ltd.
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- Latin American Coal - Colombia
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- PowerSource Philippines DevCo
- Billiton Holdings Pty Ltd - Australia
- Posco Energy - South Korea
- Borneo Indobara - Indonesia
- Port Waratah Coal Services - Australia
- Georgia Ports Authority, United States
- Chamber of Mines of South Africa
- Central Electricity Authority - India
- Gujarat Sidhee Cement - India
- GVK Power & Infra Limited - India
- IEA Clean Coal Centre - UK
- Carbofer General Trading SA - India
- Eastern Energy - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Altura Mining Limited, Indonesia
- Mintek Dendrill Indonesia
- IHS Mccloskey Coal Group - USA
- Tata Chemicals Ltd - India
- Independent Power Producers Association of India
- Bukit Baiduri Energy - Indonesia
- Rio Tinto Coal - Australia
- Mjunction Services Limited - India
- McConnell Dowell - Australia
- VISA Power Limited - India
- Tamil Nadu electricity Board
- LBH Netherlands Bv - Netherlands
- Riau Bara Harum - Indonesia
- Chettinad Cement Corporation Ltd - India
- Merrill Lynch Commodities Europe
- Sojitz Corporation - Japan
- Bharathi Cement Corporation - India
- Lanco Infratech Ltd - India
- Singapore Mercantile Exchange
- Globalindo Alam Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kaltim Prima Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indogreen Group - Indonesia
- Wood Mackenzie - Singapore
- Miang Besar Coal Terminal - Indonesia
- Madhucon Powers Ltd - India
- Mercuria Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Sical Logistics Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Bhatia International Limited - India
- Savvy Resources Ltd - HongKong
- PNOC Exploration Corporation - Philippines
- Coalindo Energy - Indonesia
- The State Trading Corporation of India Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Global Green Power PLC Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- London Commodity Brokers - England
- Vizag Seaport Private Limited - India
- The Treasury - Australian Government
- Ministry of Finance - Indonesia
- Ministry of Mines - Canada
- Interocean Group of Companies - India
- Kohat Cement Company Ltd. - Pakistan
- Indika Energy - Indonesia
- Electricity Generating Authority of Thailand
- Australian Coal Association
- Planning Commission, India
- Mercator Lines Limited - India
- Banpu Public Company Limited - Thailand
- MS Steel International - UAE
- Maharashtra Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- Bahari Cakrawala Sebuku - Indonesia
- Grasim Industreis Ltd - India
- SN Aboitiz Power Inc, Philippines
- Dalmia Cement Bharat India
- Kapuas Tunggal Persada - Indonesia
- Antam Resourcindo - Indonesia
- Krishnapatnam Port Company Ltd. - India
- GAC Shipping (India) Pvt Ltd
- Anglo American - United Kingdom
- Indonesian Coal Mining Association
- Jorong Barutama Greston.PT - Indonesia
- Vedanta Resources Plc - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining Corp, Philippines
- Videocon Industries ltd - India
- Kepco SPC Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Trasteel International SA, Italy
- Metalloyd Limited - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Indian Oil Corporation Limited
- PTC India Limited - India
- Bukit Makmur.PT - Indonesia
- CIMB Investment Bank - Malaysia
- San Jose City I Power Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Parliament of New Zealand
- Renaissance Capital - South Africa
- TeaM Sual Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- Pendopo Energi Batubara - Indonesia
- Maheswari Brothers Coal Limited - India
- Star Paper Mills Limited - India
- New Zealand Coal & Carbon
- Salva Resources Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Ambuja Cements Ltd - India
- Jindal Steel & Power Ltd - India
- Aditya Birla Group - India
- ASAPP Information Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Minerals Council of Australia
- Siam City Cement PLC, Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Kartika Selabumi Mining - Indonesia
- Ministry of Transport, Egypt
- Indian Energy Exchange, India
- Intertek Mineral Services - Indonesia
- Coastal Gujarat Power Limited - India
- Iligan Light & Power Inc, Philippines
- Bhushan Steel Limited - India
- Ceylon Electricity Board - Sri Lanka
- Larsen & Toubro Limited - India
- Therma Luzon, Inc, Philippines
- White Energy Company Limited
- Asmin Koalindo Tuhup - Indonesia
- GMR Energy Limited - India
- Makarim & Taira - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Coal and Oil Company - UAE
- Romanian Commodities Exchange
- Thiess Contractors Indonesia
- Simpson Spence & Young - Indonesia
- Price Waterhouse Coopers - Russia
- Meenaskhi Energy Private Limited - India
- Petron Corporation, Philippines
- Edison Trading Spa - Italy
- Manunggal Multi Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Bangladesh Power Developement Board
- Barasentosa Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Global Business Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Standard Chartered Bank - UAE
- Xindia Steels Limited - India
- Economic Council, Georgia
- Straits Asia Resources Limited - Singapore
- AsiaOL BioFuels Corp., Philippines
- Marubeni Corporation - India
- Energy Link Ltd, New Zealand
- Heidelberg Cement - Germany
- Bayan Resources Tbk. - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cement Manufacturers Association - India
- Commonwealth Bank - Australia
- Sakthi Sugars Limited - India
- Deloitte Consulting - India
- India Bulls Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Neyveli Lignite Corporation Ltd, - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parry Sugars Refinery, India
- Rashtriya Ispat Nigam Limited - India
- Baramulti Group, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Indo Tambangraya Megah - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bhoruka Overseas - Indonesia
- Agrawal Coal Company - India
- Siam City Cement - Thailand
- Bulk Trading Sa - Switzerland
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