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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, 07 March 16
FREIGHT MARKET MOVING POSITIVE; ALL SEGMENTS EXCEPT CAPE SHOWING A FIRM TREND
COALspot.com: The freight market was steady this past week and showing a firm trend for all segments except for Cape index.
The Baltic Dry Ind ...
Friday, 04 March 16
GLOBAL ECONOMY'S JITTERS ARE SLOWING DOWN SHIPPING EVEN FURTHER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The global economy’s shaky condition to say the least is now hampering growth and as a result demand for shipping is slowing down, something ...
Friday, 04 March 16
U.S. YEAR-TO-DATE COAL PRODUCTION TOTALED 109.3 MMST; 30.2% LOWER THAN THE COMPARABLE YEAR-TO-DATE COAL PRODUCTION IN 2015 - EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 13.1 million shor ...
Thursday, 03 March 16
INDIA'S BUDGET NOT ENOUGH TO BOOST STEELMAKERS' PROFITABILITY - FITCH RATINGS
COALspot.com: Fitch Ratings says that increase in proposed infrastructure spending in India's latest government budget is unlikely to provide a ...
Thursday, 03 March 16
BDI FURTHER STRENGTHENING; THE INCREASE IN RATES WAS NOT SUBSTANTIAL
COALspot.com: The BDI closed off on a positive note for a second week in a row, further strengthening the belief that the market might be bottoming ...
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- Samtan Co., Ltd - South Korea
- Jaiprakash Power Ventures ltd
- Aboitiz Power Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining and Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- The University of Queensland
- Petrochimia International Co. Ltd.- Taiwan
- Kepco SPC Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Karaikal Port Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Banpu Public Company Limited - Thailand
- Metalloyd Limited - United Kingdom
- Kaltim Prima Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Business Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Thai Mozambique Logistica
- Attock Cement Pakistan Limited
- Ministry of Transport, Egypt
- Indika Energy - Indonesia
- Wilmar Investment Holdings
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GVK Power & Infra Limited - India
- Coastal Gujarat Power Limited - India
- Uttam Galva Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Africa Commodities Group - South Africa
- Minerals Council of Australia
- Agrawal Coal Company - India
- Electricity Authority, New Zealand
- South Luzon Thermal Energy Corporation
- International Coal Ventures Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Directorate Of Revenue Intelligence - India
- Renaissance Capital - South Africa
- Sakthi Sugars Limited - India
- Australian Commodity Traders Exchange
- Goldman Sachs - Singapore
- Aditya Birla Group - India
- Timah Investasi Mineral - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Coal and Oil Company - UAE
- San Jose City I Power Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Romanian Commodities Exchange
- Jorong Barutama Greston.PT - Indonesia
- ASAPP Information Group - India
- Pendopo Energi Batubara - Indonesia
- Gujarat Sidhee Cement - India
- Australian Coal Association
- Posco Energy - South Korea
- White Energy Company Limited
- Xindia Steels Limited - India
- Orica Mining Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- Siam City Cement PLC, Thailand
- SMC Global Power, Philippines
- Ambuja Cements Ltd - India
- Port Waratah Coal Services - Australia
- Vijayanagar Sugar Pvt Ltd - India
- CNBM International Corporation - China
- Planning Commission, India
- Power Finance Corporation Ltd., India
- PNOC Exploration Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Economic Council, Georgia
- Intertek Mineral Services - Indonesia
- Madhucon Powers Ltd - India
- Salva Resources Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Marubeni Corporation - India
- Rashtriya Ispat Nigam Limited - India
- OPG Power Generation Pvt Ltd - India
- SMG Consultants - Indonesia
- Jindal Steel & Power Ltd - India
- Global Coal Blending Company Limited - Australia
- Sojitz Corporation - Japan
- Chettinad Cement Corporation Ltd - India
- Sinarmas Energy and Mining - Indonesia
- ICICI Bank Limited - India
- Kartika Selabumi Mining - Indonesia
- Semirara Mining Corp, Philippines
- Central Electricity Authority - India
- Essar Steel Hazira Ltd - India
- Bukit Makmur.PT - Indonesia
- Mintek Dendrill Indonesia
- Oldendorff Carriers - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Thiess Contractors Indonesia
- Commonwealth Bank - Australia
- Straits Asia Resources Limited - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Bhushan Steel Limited - India
- IHS Mccloskey Coal Group - USA
- Cement Manufacturers Association - India
- Maharashtra Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
- Kideco Jaya Agung - Indonesia
- Indian Energy Exchange, India
- Tamil Nadu electricity Board
- Kapuas Tunggal Persada - Indonesia
- Bhoruka Overseas - Indonesia
- Trasteel International SA, Italy
- PowerSource Philippines DevCo
- Simpson Spence & Young - Indonesia
- Anglo American - United Kingdom
- Indogreen Group - Indonesia
- Central Java Power - Indonesia
- Binh Thuan Hamico - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- Bulk Trading Sa - Switzerland
- Neyveli Lignite Corporation Ltd, - India
- Antam Resourcindo - Indonesia
- Orica Australia Pty. Ltd.
- Ministry of Finance - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Georgia Ports Authority, United States
- Parry Sugars Refinery, India
- Price Waterhouse Coopers - Russia
- Cigading International Bulk Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Savvy Resources Ltd - HongKong
- Malabar Cements Ltd - India
- Lanco Infratech Ltd - India
- Mercuria Energy - Indonesia
- Altura Mining Limited, Indonesia
- Therma Luzon, Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Latin American Coal - Colombia
- Borneo Indobara - Indonesia
- Meenaskhi Energy Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kohat Cement Company Ltd. - Pakistan
- Sree Jayajothi Cements Limited - India
- CIMB Investment Bank - Malaysia
- Bukit Baiduri Energy - Indonesia
- Vedanta Resources Plc - India
- Indonesian Coal Mining Association
- Kalimantan Lumbung Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- MS Steel International - UAE
- Bayan Resources Tbk. - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Larsen & Toubro Limited - India
- Carbofer General Trading SA - India
- Medco Energi Mining Internasional
- Kumho Petrochemical, South Korea
- Independent Power Producers Association of India
- Ministry of Mines - Canada
- Vizag Seaport Private Limited - India
- The Treasury - Australian Government
- Makarim & Taira - Indonesia
- Meralco Power Generation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Merrill Lynch Commodities Europe
- Heidelberg Cement - Germany
- Coalindo Energy - Indonesia
- India Bulls Power Limited - India
- Star Paper Mills Limited - India
- Deloitte Consulting - India
- Interocean Group of Companies - India
- GN Power Mariveles Coal Plant, Philippines
- Bharathi Cement Corporation - India
- Eastern Energy - Thailand
- Barasentosa Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Mjunction Services Limited - India
- Standard Chartered Bank - UAE
- Videocon Industries ltd - India
- PTC India Limited - India
- Globalindo Alam Lestari - Indonesia
- Petron Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Siam City Cement - Thailand
- TeaM Sual Corporation - Philippines
- Singapore Mercantile Exchange
- Rio Tinto Coal - Australia
- Riau Bara Harum - Indonesia
- SN Aboitiz Power Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Miang Besar Coal Terminal - Indonesia
- Parliament of New Zealand
- Energy Development Corp, Philippines
- Wood Mackenzie - Singapore
- Grasim Industreis Ltd - India
- Global Green Power PLC Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- McConnell Dowell - Australia
- New Zealand Coal & Carbon
- Chamber of Mines of South Africa
- Dalmia Cement Bharat India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bangladesh Power Developement Board
- Eastern Coal Council - USA
- Bhatia International Limited - India
- Manunggal Multi Energi - Indonesia
- Toyota Tsusho Corporation, Japan
- Baramulti Group, Indonesia
- European Bulk Services B.V. - Netherlands
- Sindya Power Generating Company Private Ltd
- The State Trading Corporation of India Ltd
- Maheswari Brothers Coal Limited - India
- Energy Link Ltd, New Zealand
- Sical Logistics Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Tata Chemicals Ltd - India
- London Commodity Brokers - England
- Edison Trading Spa - Italy
- GMR Energy Limited - India
- IEA Clean Coal Centre - UK
- VISA Power Limited - India
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