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China coastal coal freight rates continue to drop

Freight rates for vessels shipping coal from northern China to the south continued to drop amid weak shipment demand from downstream utilities.

Most ship owners chose to suspend shipping, mainly due to the decreasing offers from shippers recently.

The shipping rate for vessels of 50,000-60,000 DWT from Qinhuangdao to Guangzhou port fell 0.2 yuan/t on day and down 0.5 yuan/t from a week ago to 21.8 yuan/t on September 16, posting the lowest level since the Shanghai Shipping Exchange began tracking the index in 2011, data showed.

The rate for smaller vessels of 15,000-20,000 DWT from Qinhuangdao to Ningbo port in eastern China's Zhejiang province was 22.5 yuan/t on the same day, unchanged both on day and on week.

The rate for 30,000-40,000 DWT vessels to ship coal from Huanghua to Shanghai port stayed unchanged on day and fell 0.1 yuan/t on week to 19.6 yuan/t on the same day.

Continuous freight decline was seen in six major shipping routes. Average freight rates in eastern China saw a slower decline of 0.5 yuan/t or less; while that in south China posted a decline of 0.6 yuan/t or more.

High stocks at downstream utilities and slow winter restocking activities restrained coal demand, leading to the slackness in coastal coal shipment.

Daily coal consumption at power plants under the six coastal utilities stood at 0.48 million tonnes on September 16, down 11.1% from a week ago, while their coal stocks totaling 13.86 million tonnes, up 3.5% from a week ago, which was enough to cover 28.9 days of consumption.

source: http://en.sxcoal.com