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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, 24 February 16
PRIVATE EQUITY FUNDS LOOKING TO EXIT SHIPPING, MOST NOTABLY DRY BULK, AS OVERORDERING HAS RESULTED IN EXCESS TONNAGE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The injection of more than $13 billion in shipping from various private equity funds over the past few years has resulted in what many feared would ...
Wednesday, 24 February 16
THIRTEEN - NOT ALWAYS AN UNLUCKY NUMBER? - CLARKSONS
Back in early 1999 the price of a 5 year old Panamax bulkcarrier dipped to $13.5m, and ever since analysts have hailed purchase decisions made at t ...
Monday, 22 February 16
4200 GAR COAL INDEX SETTLES AT $27.02, DOWN 0.07% FROM LAST WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin decline 0.17 percent week over week to averaging $38.89 per ton on this past Friday, ...
Monday, 22 February 16
FREIGHT MARKETS PICKED UP SLIGHTLY THIS PAST WEEK
COALspot.com: The freight markets picked up slightly this past week.
The Baltic Dry Index (BDI) of dry-bulk shipping freights, a measure of gl ...
Friday, 19 February 16
INDONESIAN HBA HITS A NEW LOWS BELOW $51 A TON AS OVERSUPPLY, LOW DEMAND WOES PERSIST
COALspot.com: Low coal demand and excess supplies sent Indonesian benchmark coal price further deep in February 2016. HBA has slumped second time t ...
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- PetroVietnam Power Coal Import and Supply Company
- Rio Tinto Coal - Australia
- Power Finance Corporation Ltd., India
- McConnell Dowell - Australia
- Edison Trading Spa - Italy
- Altura Mining Limited, Indonesia
- Indonesian Coal Mining Association
- Kumho Petrochemical, South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Planning Commission, India
- Ceylon Electricity Board - Sri Lanka
- Iligan Light & Power Inc, Philippines
- India Bulls Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Orica Australia Pty. Ltd.
- Global Coal Blending Company Limited - Australia
- Larsen & Toubro Limited - India
- Attock Cement Pakistan Limited
- Anglo American - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Authority, New Zealand
- Indian Energy Exchange, India
- Jindal Steel & Power Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Malabar Cements Ltd - India
- Independent Power Producers Association of India
- ASAPP Information Group - India
- Bharathi Cement Corporation - India
- SMC Global Power, Philippines
- Eastern Energy - Thailand
- Commonwealth Bank - Australia
- Miang Besar Coal Terminal - Indonesia
- VISA Power Limited - India
- Ministry of Transport, Egypt
- Gujarat Mineral Development Corp Ltd - India
- Parry Sugars Refinery, India
- Gujarat Sidhee Cement - India
- London Commodity Brokers - England
- Energy Development Corp, Philippines
- Vedanta Resources Plc - India
- GVK Power & Infra Limited - India
- Mercuria Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Eastern Coal Council - USA
- White Energy Company Limited
- Therma Luzon, Inc, Philippines
- Barasentosa Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Intertek Mineral Services - Indonesia
- Africa Commodities Group - South Africa
- Global Green Power PLC Corporation, Philippines
- Coal and Oil Company - UAE
- PNOC Exploration Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Cement Manufacturers Association - India
- Trasteel International SA, Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Marubeni Corporation - India
- Kartika Selabumi Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Karaikal Port Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Oldendorff Carriers - Singapore
- Videocon Industries ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Indian Oil Corporation Limited
- Latin American Coal - Colombia
- The Treasury - Australian Government
- AsiaOL BioFuels Corp., Philippines
- Baramulti Group, Indonesia
- Sree Jayajothi Cements Limited - India
- Kideco Jaya Agung - Indonesia
- Sojitz Corporation - Japan
- Global Business Power Corporation, Philippines
- Georgia Ports Authority, United States
- Mjunction Services Limited - India
- Mercator Lines Limited - India
- IHS Mccloskey Coal Group - USA
- OPG Power Generation Pvt Ltd - India
- Tata Chemicals Ltd - India
- Savvy Resources Ltd - HongKong
- Standard Chartered Bank - UAE
- Manunggal Multi Energi - Indonesia
- Aditya Birla Group - India
- Electricity Generating Authority of Thailand
- Cigading International Bulk Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Bukit Baiduri Energy - Indonesia
- Australian Coal Association
- Asmin Koalindo Tuhup - Indonesia
- Energy Link Ltd, New Zealand
- Coalindo Energy - Indonesia
- Romanian Commodities Exchange
- Kaltim Prima Coal - Indonesia
- Bangladesh Power Developement Board
- Neyveli Lignite Corporation Ltd, - India
- Central Electricity Authority - India
- Borneo Indobara - Indonesia
- Binh Thuan Hamico - Vietnam
- Straits Asia Resources Limited - Singapore
- Siam City Cement PLC, Thailand
- CIMB Investment Bank - Malaysia
- Uttam Galva Steels Limited - India
- The State Trading Corporation of India Ltd
- Bukit Makmur.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Petron Corporation, Philippines
- MS Steel International - UAE
- Kalimantan Lumbung Energi - Indonesia
- Sindya Power Generating Company Private Ltd
- GAC Shipping (India) Pvt Ltd
- Pendopo Energi Batubara - Indonesia
- Simpson Spence & Young - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- CNBM International Corporation - China
- Directorate Of Revenue Intelligence - India
- Ministry of Finance - Indonesia
- Heidelberg Cement - Germany
- Formosa Plastics Group - Taiwan
- Makarim & Taira - Indonesia
- Madhucon Powers Ltd - India
- Medco Energi Mining Internasional
- New Zealand Coal & Carbon
- Bulk Trading Sa - Switzerland
- ICICI Bank Limited - India
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement - Thailand
- Economic Council, Georgia
- Renaissance Capital - South Africa
- Xindia Steels Limited - India
- Essar Steel Hazira Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Sinarmas Energy and Mining - Indonesia
- Ambuja Cements Ltd - India
- Thai Mozambique Logistica
- Ind-Barath Power Infra Limited - India
- Sarangani Energy Corporation, Philippines
- Carbofer General Trading SA - India
- San Jose City I Power Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Sical Logistics Limited - India
- Semirara Mining Corp, Philippines
- Indika Energy - Indonesia
- Meralco Power Generation, Philippines
- Kobexindo Tractors - Indoneisa
- Vizag Seaport Private Limited - India
- Bhatia International Limited - India
- Goldman Sachs - Singapore
- Tamil Nadu electricity Board
- Metalloyd Limited - United Kingdom
- Aboitiz Power Corporation - Philippines
- Port Waratah Coal Services - Australia
- Minerals Council of Australia
- Merrill Lynch Commodities Europe
- Gujarat Electricity Regulatory Commission - India
- Kapuas Tunggal Persada - Indonesia
- PTC India Limited - India
- Banpu Public Company Limited - Thailand
- Kepco SPC Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- PowerSource Philippines DevCo
- Riau Bara Harum - Indonesia
- Samtan Co., Ltd - South Korea
- Bayan Resources Tbk. - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Singapore Mercantile Exchange
- Dalmia Cement Bharat India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Lanco Infratech Ltd - India
- Salva Resources Pvt Ltd - India
- SMG Consultants - Indonesia
- Interocean Group of Companies - India
- Bhushan Steel Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- GMR Energy Limited - India
- Central Java Power - Indonesia
- Ministry of Mines - Canada
- Parliament of New Zealand
- Deloitte Consulting - India
- Agrawal Coal Company - India
- Grasim Industreis Ltd - India
- Toyota Tsusho Corporation, Japan
- IEA Clean Coal Centre - UK
- Sakthi Sugars Limited - India
- TeaM Sual Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Asam (Persero) Tbk - Indonesia
- Thiess Contractors Indonesia
- Krishnapatnam Port Company Ltd. - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wilmar Investment Holdings
- Rashtriya Ispat Nigam Limited - India
- Orica Mining Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- The University of Queensland
- Posco Energy - South Korea
- Star Paper Mills Limited - India
- Australian Commodity Traders Exchange
- Timah Investasi Mineral - Indoneisa
- European Bulk Services B.V. - Netherlands
- LBH Netherlands Bv - Netherlands
- Indogreen Group - Indonesia
- Coastal Gujarat Power Limited - India
- Meenaskhi Energy Private Limited - India
- Jaiprakash Power Ventures ltd
- Mintek Dendrill Indonesia
- SN Aboitiz Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- Chamber of Mines of South Africa
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