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China coastal coal freight rates drop for over a month

Freight rates for vessels shipping coal from north China ports to the south have been falling for more than a month, mainly due to continuing weak demand from utilities and strong hydropower output.

The shipping rate for vessels of 50,000-60,000 DWT from Qinhuangdao to Guangzhou port stood at 24.6 yuan/t on September 1, down 0.1 yuan/t on day and down 1.2 yuan/t from a week ago, showed data from the Shanghai Shipping Exchange.

The rate for smaller vessels of 15,000-20,000 DWT from Qinhuangdao to Ningbo port in eastern China's Zhejiang province was 23.3 yuan/t on the same day, unchanged on day but up 0.2 yuan/t on week.

The rate for 30,000-40,000 DWT vessels to ship coal from Huanghua to Shanghai port edged down 0.1 on day but up 0.5 yuan/t on week to 20.5 yuan/t on the same day.

Shipping sources said the current freight rate was decreasing at a slower pace recently, as it has almost dropped to the breakeven level.

Coal buying interests from downstream utilities remained weak, mainly due to weak industrial power demand and increased hydropower output.

Average coal consumption at power plants under the six coastal utilities stood at 0.53 million tonnes on September 1, down 5.7% from a week ago; while coal stocks climbed 0.9% on week to 12.84 million tonnes, which was enough to cover 24.1 days of consumption, up from 22.5 days a week ago.

The volume of coal shipped out of Qinhuangdao port fell 13.2% on week to 0.60 million tonnes on average each day over the week ended September 2, while daily inbound coal railings averaged 0.63 million tonnes during the same period, down 5.3% on week.

source: http://en.sxcoal.com