Strong thermal coal demand pushed up coal freight rates

Demand for thermal coal has soared since the onset of the summer season in eastern power plants, pushing up coastal coal freight rates apparently.

In Shanghai, Jiangsu, Zhejiang and Anhui, the thermal power generating capacity of power plants has peaked due to the continuous hot weather this summer, resulting in a sharp increase in coal consumption and coal supply tightness. Coal stocks of some plant plants in Zhejiang were only at a 4-day supply on Jul 14. According to coal stock statistics, major plant plants stockpiled 27.8 million tons of coal as of Jul 16. Based on daily consumption indicator (1.64 million tons per day), their stocks were at a 16.9-day supply on average.

The domestic coastal coal freight rates have staged an upward trend. According to Shanghai Shipping Exchange, for example, the coal freight rate index was 2282.48 point on Jul 18, increasing 0.88 percent over the previous week. The freight rates of some major coal shipping lines continued to hike, reaching 105 yuan/ton for 40,000-50,000--mt vessel (QHD-Shanghai), an increase of 3 yuan/ton over the previous week.