The cost of transporting 150000 tons of coal from Richards Bay to European power stations may fall further, after two days of declines, as demand for vessels to load at the port slows.
The drop was a “normal end” to a 10-day rally in which vessel-hire rates rose 14%, David Webb, a director at London-based Arrow Chartering, said yesterday.
The lull prompted freight traders to bet future hire costs for coal carriers would fall, leading to a “change in sentiment” among owners and shippers, Webb said.
Shipping accounts for about a third of the cost of transporting coal from SA to Europe. The route is the most-traded for forward freight agreements, used to bet on the cost of hiring such vessels.
Coal-shipping rates fell 2,5% to $22,80 a ton on Wednesday, according to the London-based Baltic Exchange.
Based on forward freight agreements, the cost of shipping coal from SA to Rotterdam for the next three months fell 0,8% to $19,22 a ton.
The baltic dry index, measuring the combined cost of transporting coal, iron ore, steel and grain, rose for the 17th consecutive day on Wednesday, up 0,2%.
The overall picture of supply and demand remained “incredibly sound”, Webb said.
The drop was a “normal end” to a 10-day rally in which vessel-hire rates rose 14%, David Webb, a director at London-based Arrow Chartering, said yesterday.
The lull prompted freight traders to bet future hire costs for coal carriers would fall, leading to a “change in sentiment” among owners and shippers, Webb said.
Shipping accounts for about a third of the cost of transporting coal from SA to Europe. The route is the most-traded for forward freight agreements, used to bet on the cost of hiring such vessels.
Coal-shipping rates fell 2,5% to $22,80 a ton on Wednesday, according to the London-based Baltic Exchange.
Based on forward freight agreements, the cost of shipping coal from SA to Rotterdam for the next three months fell 0,8% to $19,22 a ton.
The baltic dry index, measuring the combined cost of transporting coal, iron ore, steel and grain, rose for the 17th consecutive day on Wednesday, up 0,2%.
The overall picture of supply and demand remained “incredibly sound”, Webb said.