Freight rates for coal cargoes from northern China ports to the south strongly rebounded after two weeks of tumbling, driven by robust demand from utilities and high expectations on the spot thermal coal market.
At the beginning of 2018, freight rates on routes from Qinhuangdao to Guangzhou, Fuzhou, Ningbo, Shanghai and Zhangjiagang ports all fell down to troughs after over six weeks' rise. Freight of 40,000-50,000 DWT vessels from Qinhuangdao to Guangzhou bottomed at 57.4 yuan/t on January 3.
Since then, freight rates have been climbing back sharply. By January 10, the freight stood at 68.4 yuan/t, a rise of 19.16% within a week.
On the same day, freight rate of 40,000-50,000 DWT vessels from Qinhuangdao to Shanghai port stood at 59.6 yuan/t, 26.27% more than a week ago; that of route of Qinhuangdao-Guangzhou for 60,000-70,000 DWT vessels at 65.4 yuan/t, up 19.56%; Qinhuangdao-Ningbo on 15,000-20,000 DWT basis, 68.0 yuan/t, up 19.3%.
Rate on route from Qinhuangdao to Fuzhou rose 18.66% to 69.3 yuan/t, on 30,000-40,000 DWT basis; while that for 20,000-30,000 DWT vessels to Zhangjiagang went down to 67.3 yuan/t, growing 21.7%.
Routes from other northern ports like Tianjin, Jingtang and Huanghua also showed the same trend. Freight rate of 30,000-40,000 DWT vessels from Huanghua to Shanghai stood at 61.9 yuan/t on January 10, up 12.6 yuan/t or 25.56% from January 3.
Market players thought strong demand from utilities fueled the freight rate to pick up.
In winter heating season, which is also a dry season for hydro power station, thermal power plants are supposed to take more responsibility to heat millions of households in the south and east, where people don't heat by boilers traditionally but electric radiators or air-conditioners instead.
Daily coal consumption of the six major coastal utilities averaged 737,000 tonnes in the first ten days of January, 9.87% more than a month ago; while their combined stocks are less than 15 days of use now.
It's said coal stocks of some utilities along the Yangtze River are less than 10 days.
Vessel owners raised freight prices also because they worried about maritime traffic control in the short run. During the first days of the new year, four accidents happened in the Yangtze River and Wenzhou sea area because of the bad weather.
Meanwhile, northern ports frequently sealed cruises recently, especially in January 8 and 9, dragging down the process of vessel loading and leading to fewer ships available.
(Writing by Alex Guo Editing by Tammy Yang)
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