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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, 11 March 16
US WEEKLY COAL PRODUCTION DOWN BY 0.5 MMST
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 12.6 million shor ...
Friday, 11 March 16
FORTESCUE'S MOU WITH VALE COULD STRENGTHEN ITS BUSINESS PROFILE - FITCH
COALspot.com: Fitch Ratings says that Australia-based Fortescue Metals Group Limited's (BB+/Negative) memorandum of understanding (MOU) with Br ...
Thursday, 10 March 16
CHINA'S NEW POLICY PLAN COULD BE POSITIVE FOR SHIPPING, BUT TARGETS SEEM RATHER AMBITIOUS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
China set out its new policy plan during the course of the past weekend, but it seems to have set some very ambitious goals, which could be difficu ...
Thursday, 10 March 16
U.S. COAL EXPORTS DECLINED 23% IN 2015, AS COAL IMPORTS REMAINED STEADY
COALspot.com: The United States remains a net exporter of coal, exporting 74.0 million short tons (MMst) and importing 11 MMst in 2015.
Accord ...
Thursday, 10 March 16
IT FEELS SAFE TO SAY THAT THE MARKET IS SLOWLY AND PAINFULLY REGAINING ITS BALANCE
With the BDI marking its third consecutive positive weekly closing, it feels safe to say that the market is regaining its balance; slowly and painf ...
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- Leighton Contractors Pty Ltd - Australia
- MS Steel International - UAE
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- The State Trading Corporation of India Ltd
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- Kumho Petrochemical, South Korea
- Mercator Lines Limited - India
- Eastern Energy - Thailand
- Barasentosa Lestari - Indonesia
- Larsen & Toubro Limited - India
- Siam City Cement - Thailand
- Essar Steel Hazira Ltd - India
- SN Aboitiz Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Rio Tinto Coal - Australia
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- New Zealand Coal & Carbon
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- Marubeni Corporation - India
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- Australian Coal Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Heidelberg Cement - Germany
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- Oldendorff Carriers - Singapore
- Altura Mining Limited, Indonesia
- Parry Sugars Refinery, India
- Indian Energy Exchange, India
- Videocon Industries ltd - India
- Posco Energy - South Korea
- Gujarat Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Savvy Resources Ltd - HongKong
- Port Waratah Coal Services - Australia
- Malabar Cements Ltd - India
- Simpson Spence & Young - Indonesia
- Aboitiz Power Corporation - Philippines
- Indogreen Group - Indonesia
- Price Waterhouse Coopers - Russia
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- LBH Netherlands Bv - Netherlands
- Karbindo Abesyapradhi - Indoneisa
- Parliament of New Zealand
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- Deloitte Consulting - India
- Kaltim Prima Coal - Indonesia
- Economic Council, Georgia
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- Global Coal Blending Company Limited - Australia
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- Agrawal Coal Company - India
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- Bank of Tokyo Mitsubishi UFJ Ltd
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- Ministry of Mines - Canada
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- Mjunction Services Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Indika Energy - Indonesia
- Lanco Infratech Ltd - India
- Jindal Steel & Power Ltd - India
- IHS Mccloskey Coal Group - USA
- Gujarat Sidhee Cement - India
- Bahari Cakrawala Sebuku - Indonesia
- Sree Jayajothi Cements Limited - India
- Thiess Contractors Indonesia
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- London Commodity Brokers - England
- Uttam Galva Steels Limited - India
- Petron Corporation, Philippines
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- Indian Oil Corporation Limited
- Electricity Generating Authority of Thailand
- Carbofer General Trading SA - India
- AsiaOL BioFuels Corp., Philippines
- Commonwealth Bank - Australia
- Indo Tambangraya Megah - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Anglo American - United Kingdom
- Medco Energi Mining Internasional
- Singapore Mercantile Exchange
- Vedanta Resources Plc - India
- Interocean Group of Companies - India
- Formosa Plastics Group - Taiwan
- IEA Clean Coal Centre - UK
- Billiton Holdings Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Wilmar Investment Holdings
- Sical Logistics Limited - India
- Antam Resourcindo - Indonesia
- Tamil Nadu electricity Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kapuas Tunggal Persada - Indonesia
- PTC India Limited - India
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- Semirara Mining Corp, Philippines
- South Luzon Thermal Energy Corporation
- Kepco SPC Power Corporation, Philippines
- Sojitz Corporation - Japan
- Semirara Mining and Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vijayanagar Sugar Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meenaskhi Energy Private Limited - India
- ASAPP Information Group - India
- VISA Power Limited - India
- Sarangani Energy Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Bhatia International Limited - India
- TeaM Sual Corporation - Philippines
- Minerals Council of Australia
- Ministry of Finance - Indonesia
- Holcim Trading Pte Ltd - Singapore
- GMR Energy Limited - India
- Jaiprakash Power Ventures ltd
- International Coal Ventures Pvt Ltd - India
- Australian Commodity Traders Exchange
- SMG Consultants - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Coastal Gujarat Power Limited - India
- Xindia Steels Limited - India
- Mintek Dendrill Indonesia
- Samtan Co., Ltd - South Korea
- Independent Power Producers Association of India
- Renaissance Capital - South Africa
- Bhushan Steel Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Orica Mining Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Latin American Coal - Colombia
- Cigading International Bulk Terminal - Indonesia
- Standard Chartered Bank - UAE
- Straits Asia Resources Limited - Singapore
- Chamber of Mines of South Africa
- Chettinad Cement Corporation Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Makarim & Taira - Indonesia
- Electricity Authority, New Zealand
- ICICI Bank Limited - India
- White Energy Company Limited
- Coal and Oil Company - UAE
- Bukit Makmur.PT - Indonesia
- Power Finance Corporation Ltd., India
- Karaikal Port Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- Indonesian Coal Mining Association
- European Bulk Services B.V. - Netherlands
- Bangladesh Power Developement Board
- Gujarat Mineral Development Corp Ltd - India
- Bayan Resources Tbk. - Indonesia
- Energy Link Ltd, New Zealand
- Manunggal Multi Energi - Indonesia
- Romanian Commodities Exchange
- Krishnapatnam Port Company Ltd. - India
- Eastern Coal Council - USA
- Toyota Tsusho Corporation, Japan
- Mercuria Energy - Indonesia
- Edison Trading Spa - Italy
- Intertek Mineral Services - Indonesia
- Madhucon Powers Ltd - India
- Baramulti Group, Indonesia
- Alfred C Toepfer International GmbH - Germany
- India Bulls Power Limited - India
- Maheswari Brothers Coal Limited - India
- Banpu Public Company Limited - Thailand
- Riau Bara Harum - Indonesia
- Central Electricity Authority - India
- Africa Commodities Group - South Africa
- Ambuja Cements Ltd - India
- Coalindo Energy - Indonesia
- PowerSource Philippines DevCo
- Directorate Of Revenue Intelligence - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kobexindo Tractors - Indoneisa
- Iligan Light & Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Merrill Lynch Commodities Europe
- Thai Mozambique Logistica
- Metalloyd Limited - United Kingdom
- Goldman Sachs - Singapore
- Kartika Selabumi Mining - Indonesia
- SMC Global Power, Philippines
- Central Java Power - Indonesia
- Kideco Jaya Agung - Indonesia
- Cement Manufacturers Association - India
- San Jose City I Power Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Attock Cement Pakistan Limited
- OPG Power Generation Pvt Ltd - India
- Aditya Birla Group - India
- GVK Power & Infra Limited - India
- The University of Queensland
- Star Paper Mills Limited - India
- Ministry of Transport, Egypt
- McConnell Dowell - Australia
- Siam City Cement PLC, Thailand
- Planning Commission, India
- Jorong Barutama Greston.PT - Indonesia
- Dalmia Cement Bharat India
- Tata Chemicals Ltd - India
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