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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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Wednesday, 30 March 16
MINISTRY OF ENERGY AND MINERAL RESOURCES OF INDONESIA TO REVISE METHODOLOGY TO DETERMINE THE SELLING PRICE OF COAL TO MINE-MOUTH POWER PLANTS
COALspot.com: Ministry of Energy and Mineral Resources (ESDM) of Indonesia to review to revise methodology to determine the selling price of co ...
Wednesday, 30 March 16
VALEMAXES: THE BIGGEST NIGHTMARE OF TODAY'S DRY BULK MARKET - INTERMODAL
At a time that Europe is still dealing with the aftermath of the terrorist attacks in Brussels our society is daily bombarded with news of terroris ...
Tuesday, 29 March 16
BULK CARRIER VENTILATION - CAPTAIN PAUL R. WALTON
KNOWLEDGE TO ELEVATE
Moisture damage is a source of many cargo claims. Claimants allege that it is brought about by the ship’s failure t ...
Monday, 28 March 16
INDONESIAN WEEKLY CS50 COAL INDEX CLOSED SLIGHTLY FIRM; CS 57 INDEX CLOSED WEAK
COALspot.com: Average 5000 GAR coal index of Indonesian origin rose 0.03 percent week over week to averaging $38.91 per ton on this past Thursday, ...
Monday, 28 March 16
THE SUPRAMAX INDEX WAS UP TWENTY-FOUR POINTS TO 473 POINTS
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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- Makarim & Taira - Indonesia
- Gujarat Sidhee Cement - India
- Energy Link Ltd, New Zealand
- Medco Energi Mining Internasional
- Vedanta Resources Plc - India
- Kohat Cement Company Ltd. - Pakistan
- Iligan Light & Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Indian Oil Corporation Limited
- Sree Jayajothi Cements Limited - India
- IEA Clean Coal Centre - UK
- Maharashtra Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- Directorate Of Revenue Intelligence - India
- Kapuas Tunggal Persada - Indonesia
- Simpson Spence & Young - Indonesia
- Tamil Nadu electricity Board
- Power Finance Corporation Ltd., India
- Manunggal Multi Energi - Indonesia
- Sical Logistics Limited - India
- The Treasury - Australian Government
- Orica Mining Services - Indonesia
- Banpu Public Company Limited - Thailand
- Metalloyd Limited - United Kingdom
- Krishnapatnam Port Company Ltd. - India
- OPG Power Generation Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- SMG Consultants - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kepco SPC Power Corporation, Philippines
- Lanco Infratech Ltd - India
- PTC India Limited - India
- Sinarmas Energy and Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- IHS Mccloskey Coal Group - USA
- Deloitte Consulting - India
- London Commodity Brokers - England
- Petrochimia International Co. Ltd.- Taiwan
- Parliament of New Zealand
- Kaltim Prima Coal - Indonesia
- ICICI Bank Limited - India
- Miang Besar Coal Terminal - Indonesia
- Indogreen Group - Indonesia
- Australian Coal Association
- Savvy Resources Ltd - HongKong
- Neyveli Lignite Corporation Ltd, - India
- Borneo Indobara - Indonesia
- Therma Luzon, Inc, Philippines
- GVK Power & Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- The University of Queensland
- Bukit Asam (Persero) Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Kartika Selabumi Mining - Indonesia
- Petron Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Agrawal Coal Company - India
- Mjunction Services Limited - India
- Jaiprakash Power Ventures ltd
- SMC Global Power, Philippines
- Straits Asia Resources Limited - Singapore
- Wilmar Investment Holdings
- Altura Mining Limited, Indonesia
- Parry Sugars Refinery, India
- Bharathi Cement Corporation - India
- Mintek Dendrill Indonesia
- India Bulls Power Limited - India
- Energy Development Corp, Philippines
- Electricity Generating Authority of Thailand
- Jorong Barutama Greston.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Kumho Petrochemical, South Korea
- Jindal Steel & Power Ltd - India
- Electricity Authority, New Zealand
- White Energy Company Limited
- Bhushan Steel Limited - India
- Coal and Oil Company - UAE
- Singapore Mercantile Exchange
- Australian Commodity Traders Exchange
- Port Waratah Coal Services - Australia
- Oldendorff Carriers - Singapore
- Baramulti Group, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- Alfred C Toepfer International GmbH - Germany
- AsiaOL BioFuels Corp., Philippines
- Pendopo Energi Batubara - Indonesia
- Ministry of Finance - Indonesia
- Thai Mozambique Logistica
- Merrill Lynch Commodities Europe
- Ministry of Transport, Egypt
- Chettinad Cement Corporation Ltd - India
- Chamber of Mines of South Africa
- TeaM Sual Corporation - Philippines
- GMR Energy Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Price Waterhouse Coopers - Russia
- Asmin Koalindo Tuhup - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Business Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- PNOC Exploration Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ambuja Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- Commonwealth Bank - Australia
- Carbofer General Trading SA - India
- PowerSource Philippines DevCo
- Grasim Industreis Ltd - India
- Indika Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bhatia International Limited - India
- VISA Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Timah Investasi Mineral - Indoneisa
- CNBM International Corporation - China
- Renaissance Capital - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Malabar Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Standard Chartered Bank - UAE
- New Zealand Coal & Carbon
- Edison Trading Spa - Italy
- Barasentosa Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- McConnell Dowell - Australia
- Ministry of Mines - Canada
- Intertek Mineral Services - Indonesia
- Vizag Seaport Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coalindo Energy - Indonesia
- Mercuria Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Independent Power Producers Association of India
- CIMB Investment Bank - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Latin American Coal - Colombia
- Marubeni Corporation - India
- SN Aboitiz Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Holcim Trading Pte Ltd - Singapore
- MS Steel International - UAE
- Rio Tinto Coal - Australia
- South Luzon Thermal Energy Corporation
- Siam City Cement PLC, Thailand
- Bayan Resources Tbk. - Indonesia
- Cement Manufacturers Association - India
- Sarangani Energy Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wood Mackenzie - Singapore
- Videocon Industries ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Georgia Ports Authority, United States
- Anglo American - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
- Tata Chemicals Ltd - India
- Salva Resources Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Bangladesh Power Developement Board
- Coastal Gujarat Power Limited - India
- Eastern Coal Council - USA
- Indo Tambangraya Megah - Indonesia
- Attock Cement Pakistan Limited
- Leighton Contractors Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Ind-Barath Power Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Uttam Galva Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Romanian Commodities Exchange
- Karaikal Port Pvt Ltd - India
- Meralco Power Generation, Philippines
- Maheswari Brothers Coal Limited - India
- Bhoruka Overseas - Indonesia
- Siam City Cement - Thailand
- Binh Thuan Hamico - Vietnam
- Thiess Contractors Indonesia
- Star Paper Mills Limited - India
- Global Coal Blending Company Limited - Australia
- The State Trading Corporation of India Ltd
- Kideco Jaya Agung - Indonesia
- ASAPP Information Group - India
- Central Electricity Authority - India
- Central Java Power - Indonesia
- Bulk Trading Sa - Switzerland
- Larsen & Toubro Limited - India
- Aditya Birla Group - India
- LBH Netherlands Bv - Netherlands
- Indonesian Coal Mining Association
- GAC Shipping (India) Pvt Ltd
- Formosa Plastics Group - Taiwan
- Directorate General of MIneral and Coal - Indonesia
- Heidelberg Cement - Germany
- Minerals Council of Australia
- Sindya Power Generating Company Private Ltd
- Bukit Baiduri Energy - Indonesia
- Economic Council, Georgia
- Interocean Group of Companies - India
- Mercator Lines Limited - India
- Trasteel International SA, Italy
- Sakthi Sugars Limited - India
- Planning Commission, India
- Billiton Holdings Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Eastern Energy - Thailand
- Rashtriya Ispat Nigam Limited - India
- Posco Energy - South Korea
- Africa Commodities Group - South Africa
- Antam Resourcindo - Indonesia
- Goldman Sachs - Singapore
- Dalmia Cement Bharat India
- Xindia Steels Limited - India
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