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Abstract

Bulk shipping is now a globalized industry, with market prices entirely dependent on the world’s economic climate. For the bulk shipping market, the steel price index is a crucial standard of reference. In a global industry, the ability to understand the international relationship between changes in information and their effects on economics can help to reduce losses caused by the uncertainty of risk. Because the types of ships and contracts used in bulk shipping are wide-ranging, market participants tend to have difficulty in determining market price changes and trends, and are therefore forced to face greater market uncertainty and volatility. Because steel price is one of the leading indicators used in the bulk shipping market, a clear understanding of steel price index fluctuations can help to reduce the risks associated with bulk shipping. This study uses the vector autoregressive moving-average model as the principle method of analysis to determine how three major economic variables representative of Asian Steel Price Index (ASI), European Steel Price Index (ESI), and North American Steel Price Index (NASI) might influence one another. The results are as follows: (1) ASI is affected by its own positive changes as well as those of NASI, whereas the ESI is only affected by its own moving average. (2) The ASI and NASI are considered as leading indicators. This study aims to provide bulk shipping participants with additional ideas to determine the ideal time to enter the market

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