Strengthening China coal demand lifts largest shipping costs

Friday, 24 Jun 2011

It is reported that strengthening Chinese demand for power station coal helped bolster charter rates for capsize vessels that can carry the fuel.

According to the Baltic Exchange in London Charter rates for the vessels which also transport iron ore rose 2% to USD 10,453 a day. That was the biggest gain of the four vessel sizes tracked by the bourse Baltic Dry Index which fell 0.2% to 1,406 points. Coal used by power stations is also called thermal coal.

Mr Jeffrey Landsberg president of New York based shipping analysts Commodore Research & Consultancy said “You still have unbelievable strength in the thermal coal market. That has helped demand for capesize ships the most because they are cheaper than other vessels.”

Owners are contending with a fleet that growing faster than seaborne trade in raw materials. Seaborne trade in bulk commodities will expand 3.9% to 3.4 billion metric tons this year while the fleet transportation capacity will swell 13% to 612.9 million deadweight tons estimates the research unit of Clarkson Plc the world largest shipbroker.

Panamax vessels, the largest to pass through the Panama Canal, declined 1.7% to USD 14,580 a day. Supramax and handysize ships carry grains, coal and ore. Supramaxes rose 0.04% to USD 13,789 a day while handysizes fell 0.5% to USD 10,738 the 23rd consecutive decline.
(sourced from Bloomberg)