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China’s benchmark price for thermal coal reportedly fell for the twelfth straight week due to slower economic expansion and increased output from the country’s hydroelectric resources.
In a Bloomberg report, the China Coal Transport and Distribution Association said power station coal at the port of Qinhuangdao dropped to about $US97 per tonne.
Dramatic increases in water levels for the Yellow river are being attributed to a boost in hydropower which produced 2% more output last month compared to June 2011.
Coal-fired power in contrast decreased 4% over the same period.
The impact of slumping Chinese coal demand on the traffic of Panamax bulk carriers has been direct as cargoes on the largest ships to transit the Panama Canal dropped 33% in July.
Bloomberg noted that only 151 new Panamax cargoes were reported in July versus 224 for the same period last year and 174 for both May and June 2012.
The average Panamax hire rate fell 2% on the month and was now 42% lower than the high point last April.
Expansion of the Panama Canal, expected to be completed in 2014, has stoked anticipation regarding increased Panamax traffic from the US to Asia.
The new canal facilities are planned to accommodate a “New Panamax” class of ship, capable of carrying at least twice as many containers as standard Panamax vessels.
