Coastal coal freight rates in China registered expanded declines during the past week, sinking to a new low since late October, as supply surplus exacerbated amid lackluster purchases of thermal coal from power plants.

The China Coastal Coal Freight Composite index, which tracks rates for vessels carrying coal from northern China ports to ports in the east and south, slumped 16.37% from the week before to 683.23 points on December 20, according to the Shanghai Shipping Exchange. It was 17.35% lower than the previous month and 28.77% lower than the year-ago level.

In the reported week, power groups continued slackening thermal coal purchases, resulting in few concluded trades and aggressive counterbids. With tepid shipping demand, nowhere to find any supports for coastal coal delivery market.

Although cold waves were moving southwards, the impact over shipping market was limited. No powerful windy or smoggy weather occurred to disrupt vessel turnover.

Since industrial growth slowed down and the country lacked consumption stimulus, non-power clients also presented quite ordinary demand.

Around the end of the year, vessel owners engaged in overseas operations have shifted to the domestic market, intensifying oversupply and making it hard for freight rates to rebound.

Most shipping routes fell 3-9.8 yuan/t compared to week-ago levels. Rates for the 50,000-60,000 DWT vessels carrying coal from Qinhuangdao to Guangzhou port increased by 9.8 yuan/t week on week to 39.4 yuan/t on average, while those for 60,000-70,000 DWT vessels on the same route reached 30.3 yuan/t, falling 8.2 yuan/t from a week ago.

Internationally, the Baltic Dry Index, tracking rates for ships carrying dry bulk commodities, stood at 976 points on December 19, falling by 7.68% from 1,051 points from a week ago.

The coal freight rate for Panamax vessels from Indonesia to China was $5.82/t on December 20, down $0.57/t on the week, while that for Supramax vessels from Indonesia to China stood at $9.01/t, $0.42/t lower than that on December 13. The rate of Capesize vessels from Australia to China fell $0.97/t to $10.64/t on the same day.

In the near term, the coal shipping market could be hard to gain strength from demand and weather, possibly signaling an end of peak hour for coastal coal delivery market this winter. More attention should be given to how winter impact shipping demand.