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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, 09 March 16
U.S. COAL EXPORTS DECLINED 24% (74 MMST) IN 2015; COAL PRODUCTION IS EXPECTED TO DECREASE BY 111 MMST IN 2016 - EIA
U.S. Coal Supply
EIA estimates that U.S. coal production for February 2016 was 54 million short tons (MMst), a 4 MMst (7%) decrease from the prev ...
Wednesday, 09 March 16
RI MAY HAVE TO IMPORT COAL FOR FUTURE POWER PLANTS: STUDY - THE JAKARTA POST
With coal prices continuing to decline, Indonesia will struggle to provide the coal needed to fire up its power stations in the near future, a stud ...
Tuesday, 08 March 16
INDONESIA HIKES COAL BENCHMARK PRICE FOR THE FIRST TIME IN 12 MONTHS
COALspot.com: Low coal demand and excess supplies sent Indonesian benchmark coal price further deep in February 2016, but up slightly in Mar ...
Tuesday, 08 March 16
THE DRY CARGO MARKET ENDURED ONE OF ITS MOST DIFFICULT YEARS IN 2015, EXPERIENCING LOWS NOT SEEN SINCE THE MID 1980S - CLARKSONS
Whilst shipping and offshore markets have seen some good opportunities during 2015, overall there have been unprecedented challenges, so we are ver ...
Monday, 07 March 16
INDONESIAN 5700 GAR COAL INDEX DECLINE $0.05 A TON WEEK OVER WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin decline 0.28 percent week over week to averaging $38.66 per ton on this past Friday, ...
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- Sree Jayajothi Cements Limited - India
- Central Java Power - Indonesia
- Bulk Trading Sa - Switzerland
- IHS Mccloskey Coal Group - USA
- Intertek Mineral Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Parliament of New Zealand
- Marubeni Corporation - India
- Commonwealth Bank - Australia
- International Coal Ventures Pvt Ltd - India
- SMC Global Power, Philippines
- Cigading International Bulk Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Makarim & Taira - Indonesia
- Coastal Gujarat Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Thiess Contractors Indonesia
- Altura Mining Limited, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Indian Energy Exchange, India
- Mercator Lines Limited - India
- Deloitte Consulting - India
- Karaikal Port Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Straits Asia Resources Limited - Singapore
- Orica Australia Pty. Ltd.
- San Jose City I Power Corp, Philippines
- Carbofer General Trading SA - India
- Dalmia Cement Bharat India
- Agrawal Coal Company - India
- Tata Chemicals Ltd - India
- Mjunction Services Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Jaiprakash Power Ventures ltd
- Simpson Spence & Young - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Development Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- Thai Mozambique Logistica
- Bhatia International Limited - India
- Merrill Lynch Commodities Europe
- Singapore Mercantile Exchange
- Economic Council, Georgia
- Standard Chartered Bank - UAE
- Riau Bara Harum - Indonesia
- Bangladesh Power Developement Board
- Lanco Infratech Ltd - India
- Formosa Plastics Group - Taiwan
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- Indika Energy - Indonesia
- Electricity Authority, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- VISA Power Limited - India
- OPG Power Generation Pvt Ltd - India
- The University of Queensland
- Semirara Mining Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Barasentosa Lestari - Indonesia
- Indian Oil Corporation Limited
- Semirara Mining and Power Corporation, Philippines
- London Commodity Brokers - England
- Globalindo Alam Lestari - Indonesia
- Petron Corporation, Philippines
- PTC India Limited - India
- European Bulk Services B.V. - Netherlands
- Metalloyd Limited - United Kingdom
- Siam City Cement PLC, Thailand
- Bhushan Steel Limited - India
- Larsen & Toubro Limited - India
- IEA Clean Coal Centre - UK
- ASAPP Information Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tamil Nadu electricity Board
- Antam Resourcindo - Indonesia
- Pendopo Energi Batubara - Indonesia
- Global Coal Blending Company Limited - Australia
- White Energy Company Limited
- Ceylon Electricity Board - Sri Lanka
- Vedanta Resources Plc - India
- The Treasury - Australian Government
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sojitz Corporation - Japan
- Asmin Koalindo Tuhup - Indonesia
- GMR Energy Limited - India
- Malabar Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Indonesian Coal Mining Association
- Georgia Ports Authority, United States
- Pipit Mutiara Jaya. PT, Indonesia
- Global Business Power Corporation, Philippines
- Renaissance Capital - South Africa
- Baramulti Group, Indonesia
- Edison Trading Spa - Italy
- TeaM Sual Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Gujarat Sidhee Cement - India
- The State Trading Corporation of India Ltd
- Videocon Industries ltd - India
- Grasim Industreis Ltd - India
- Medco Energi Mining Internasional
- Posco Energy - South Korea
- GAC Shipping (India) Pvt Ltd
- Planning Commission, India
- Meralco Power Generation, Philippines
- Directorate Of Revenue Intelligence - India
- Anglo American - United Kingdom
- Jindal Steel & Power Ltd - India
- Aboitiz Power Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Karbindo Abesyapradhi - Indoneisa
- Energy Link Ltd, New Zealand
- Parry Sugars Refinery, India
- Heidelberg Cement - Germany
- Ministry of Mines - Canada
- ICICI Bank Limited - India
- CNBM International Corporation - China
- Maheswari Brothers Coal Limited - India
- Sical Logistics Limited - India
- Global Green Power PLC Corporation, Philippines
- Wilmar Investment Holdings
- Siam City Cement - Thailand
- Minerals Council of Australia
- MS Steel International - UAE
- South Luzon Thermal Energy Corporation
- AsiaOL BioFuels Corp., Philippines
- Port Waratah Coal Services - Australia
- Alfred C Toepfer International GmbH - Germany
- Toyota Tsusho Corporation, Japan
- PowerSource Philippines DevCo
- Price Waterhouse Coopers - Russia
- Bukit Baiduri Energy - Indonesia
- New Zealand Coal & Carbon
- Indogreen Group - Indonesia
- Eastern Coal Council - USA
- McConnell Dowell - Australia
- Interocean Group of Companies - India
- Chamber of Mines of South Africa
- PetroVietnam Power Coal Import and Supply Company
- SN Aboitiz Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- GVK Power & Infra Limited - India
- Power Finance Corporation Ltd., India
- Meenaskhi Energy Private Limited - India
- Kobexindo Tractors - Indoneisa
- Electricity Generating Authority of Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Aditya Birla Group - India
- CIMB Investment Bank - Malaysia
- Borneo Indobara - Indonesia
- Rio Tinto Coal - Australia
- Salva Resources Pvt Ltd - India
- Romanian Commodities Exchange
- Banpu Public Company Limited - Thailand
- Central Electricity Authority - India
- Binh Thuan Hamico - Vietnam
- Indo Tambangraya Megah - Indonesia
- Ministry of Finance - Indonesia
- Star Paper Mills Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Ind-Barath Power Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Goldman Sachs - Singapore
- Latin American Coal - Colombia
- Bukit Makmur.PT - Indonesia
- Madhucon Powers Ltd - India
- Attock Cement Pakistan Limited
- Sindya Power Generating Company Private Ltd
- Essar Steel Hazira Ltd - India
- Vizag Seaport Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Kideco Jaya Agung - Indonesia
- Timah Investasi Mineral - Indoneisa
- Coalindo Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Eastern Energy - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Iligan Light & Power Inc, Philippines
- Mercuria Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Xindia Steels Limited - India
- Australian Coal Association
- Ambuja Cements Ltd - India
- Australian Commodity Traders Exchange
- Rashtriya Ispat Nigam Limited - India
- Sakthi Sugars Limited - India
- Cement Manufacturers Association - India
- Jorong Barutama Greston.PT - Indonesia
- Orica Mining Services - Indonesia
- Coal and Oil Company - UAE
- Samtan Co., Ltd - South Korea
- Kepco SPC Power Corporation, Philippines
- Trasteel International SA, Italy
- SMG Consultants - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bhoruka Overseas - Indonesia
- Bharathi Cement Corporation - India
- Kumho Petrochemical, South Korea
- Kohat Cement Company Ltd. - Pakistan
- Wood Mackenzie - Singapore
- India Bulls Power Limited - India
- Ministry of Transport, Egypt
- Gujarat Mineral Development Corp Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
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