China's coastal bulk cargo shipping market softened slightly in the week ending June 15 amid slack demand, with a wait-and-see mood haunting downstream enterprises.
Regarding coal, power producers became restrained from buying the material as power use for air-conditioning weakened amid not very high temperature in southern China.
Daily coal consumption by the six main coastal utilities slid to 670,000 tonnes in the past few days, with coal stocks rebounding to meet 19-day consumption.
Increasing coal stocks at northern and southern ports were also a reflection of low purchase demand from power plants.
Nevertheless, as high temperature is around the corner, government authorities have taken an array of measures to secure coal supplies and curb price hike, like pushing more effective railway coal transportation.
On June 10, Daqin line transported a record high of 1.37 million tonnes of coal. On June 9, Shenhua lowered the monthly term contract price. On June 15, Fenwei CCI 5500 thermal coal price stood at 573 yuan/t ($88.9) FOB northern ports with VAT, holding at the same level with that in the previous week.
Under such circumstances, coastal coal shipping rates inched down.
The freight rate for 40,000-50,000 DWT vessels stood at 35.4 yuan/t from Qinhuangdao to Shanghai on June 15, dropping 1.5 yuan/t from a week ago, showed data from Shanghai Shipping Exchange. That for 60,000-70,000 DWT vessels on Qinhuangdao-Guangzhou route was 47.2 yuan/t on the same day, decreasing 2 yuan/t from the previous week.
Yet, most ship-owners are holding an optimistic view for the future shipping market, citing soaring fuel oil prices and vessel congestion at northern ports.
Steel products stocks kept dropping, fueling further rebound in futures price. What's more, propelled by sizable profit, steel makers were active to release capacity, with daily crude steel output nationwide scoring a record high.
But the demand for iron ore barely increased, as most steel mills boasted abundant stocks of the raw material.
On June 15, the coastal freight index of metal ore was at 1117.39, declining 4.5% from a week earlier.
Sources:sxcoal
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