An economic model of the iron ore trade

Iron ore is among the biggest, non-energy extractive industry in the world in terms of value, and the biggest in terms of the volumes of cargo it channels in international trade. Two key characteristics of the iron ore market are central to its study: firstly, there is only a small number of buyers and sellers; and secondly, there is a great degree of interdependence among buyers and sellers and both groups are aware of this interdependence. For buyers, security of supplies is crucial. For sellers, long-term commitment from importers is essential in order to maintain the long-run viability of mining projects. Since the 1960s, long-term contracts have been, and still are, the main vehicle used in international iron ore trade. Under the light of the above peculiarities of the iron market, a non-competitive analytical framework is adopted. This thesis proposes an alternative profit maximising behaviour different to the solutions offered by oligopoly and bilateral monopoly theorists. In this case, the importer enters negotiations with complete knowledge of his own minimum acceptable price, a possible idea of his partner's maximum acceptable price and also an idea (which can be held with varying degrees of certainty) of what alternative suppliers may be able to offer. This will restrict the range of prices over which negotiations take place and will mitigate the bargaining power of the seller. A buyer is likely to act in a similar manner, knowing that the seller has alternative export outlets, but he can also use other bargaining tools to achieve a better deal. A quite common tool is the promise of long term commitment through the signing of contracts, acquisition of equity stakes in mines or provision of financing facilities. The behaviour of the trading partners in such an oligopoly/oligopsony (or bilateral oligopoly) environment is also studied empirically with a relatively simple and tried econometric technique, borrowed from consumption and investment theory and applied for the first time for all top iron ore importers, who collectively have accounted for approximately 90% of world trade in the last 35 years. The model performs well in most cases and reveals: firstly, different results from previous research in the case of Japan; and secondly - and most importantly - substantial differences in the way Far East and West European importers behave

Market conditions, trader types and price–volume relation in energy futures markets

We investigate the asymmetric relations between trading volume and price changes, and trading volume and price volatility of energy futures contracts across maturities and under different market conditions. Using a relatively long sample of daily observations, we examine whether the impact of trading volume on returns and volatility of futures contracts can be time-varying and dependent on the market condition. We differentiate the market condition based on the slope of the forward curve into backwardation and contango. The results indicate that trading volume and returns are positively related when the market is in backwardation and negatively related when the market is in contango. In addition, the positive relation between changes in trading volume and volatility of futures contracts seem to be stronger when the market is in backwardation than when it is in contango. Finally, the results indicate that, to a certain extent, trade participation and trading activities of agents in energy futures markets can be explained by the slope of the forward curve which reflects the market condition and sentiment

Time-varying convergence in European electricity spot markets and their association with carbon and fuel prices

Long-run dynamics of electricity prices are expected to reflect fuel price developments, since fuels generally account for a large share in the cost of generation. As an integrated European market for electricity develops, wholesale electricity prices should be converging as a result of market coupling and increased interconnectivity. Electricity mixes are also changing, spurred by a drive to significantly in-crease the share of renewables. Consequently, the electricity wholesale price dynamics are evolving, and the fuel-electricity price nexus that has been described in the literature is likely to reflect this evolution. This study investigates associations between spot prices from the British, French and Nordpool markets with those in connected electricity markets and fuel input prices, from December 2005 to October 2013. In order to assess the time-varying dynamics of electricity spot price series, localized autocorrelation functions are used. Electricity spot prices in the three markets are found to have stationary and non-stationary periods. When a trend in spot prices is observed, it is likely to reflect the trend in fuel prices. Cointegration analysis is then used to assess co-movement between electricity spot prices and fuel inputs to generation. The results show that British electricity spot prices are associated with fuel prices and not with price developments in connected markets, while the opposite is observed in the French and Nordpool day-ahead markets

Does quality pay? The case of the dry bulk market

Following important changes in the safety regulation of tankers, the dry bulk sector is coming under the spotlight in a safety and quality perspective. Nominal freight differentiation between 'quality' and 'other' tonnage has been observed occasionally and much lip service has been paid to promoting the need for younger and safer ships. Whether or not these signals actually manifest in a market initiative for the enhancement of the standards of the world bulk carrier fleet is debatable. This paper investigates the possible existence of a two-tier spot freight market for medium and large bulk carriers of differing age. Known voyage fixtures are investigated for four representative years since the end of the 1980s, during which contrasting freight market conditions prevailed. In all but very few cases, there was no statistically significant difference between rates paid to older and younger tonnage. In those few cases where such differences were statistically significant, they never exceeded 10%.Shipping economics Dry-bulk markets Two-tier freight markets

Association of Paraoxonase-1 and NT-proBNP with Clinical, Clinico-Pathologic and Echocardiographic Variables in Dogs with Mitral Valve Disease

The objective of the present study was to measure the concentration of Paraoxonase-1 (PON-1) and N-terminal-prohormone-B-type natriuretic peptide (NT-proBNP), in the serum of dogs with degenerative Mitral Valve Disease (MVD), in order to identify their association with the clinical stage and specific clinico-pathologic and echocardiographic findings.Eighty dogs diagnosed with MVD and staged according to the ACVIM (American College of Veterinary Internal Medicine) consensus statement (B1, B2, C and D), based on their clinical, radiographic, and echocardiographic findings, were included in the study. NT-proBNP was measured only in stage B1 and B2 dogs. Clinical stage did not have a significant effect on PON-1 concentrations (p = 0.149), but NT-proBNP levels were lower in B1 dogs (p = 0.001). A significant correlation between PON-1 and total plasma proteins (p = 0.001), albumin (p = 0.003) and white blood cell count (p = 0.041) was detected, whereas there was no significant correlation (p = 0.847) between PON-1 and NT-proBNP concentrations. PON-1 showed a significant but weak negative correlation with normalized left ventricular internal diameter at diastole (LVIDdn) (p = 0.022) and systole (LVIDsn) (p = 0.012), as well as mitral valve E to A wave velocity ratio (MV E/A) (p = 0.015), but not with Left Atrial to Aortic root ratio (LA/Ao) (p = 0.892) or fractional shortening (FS%) (p = 0.944). PON-1 seems to be an insensitive marker of clinical stage and disease severity in MVD, but can be indicative of some clinico-pathological and echocardiographic changes. NT-proBNP changes are independent of oxidative stress