Record coal stocks at power plants in China threaten to diminish returns for dry bulk ship owners to the lowest in more than a decade
According to a Bloomberg report by Rob Sheridan and Isaac Arnsdorf, record coal stocks at power plants in China, the biggest consumer of the fuel, are threatening to reverse the rally in rates for commodity carriers and diminish returns for ship owners to the lowest in more than a decade.
The utilities have 91 million metric tons in reserve and stockpiles at the largest ports come to more than 90 percent of capacity, according to the China Coal Transport & Distribution Association and SteelHome, a Shanghai-based research company.
Panamax rates will drop 48 percent to an average of $5,000 a day this quarter, said Steve Rodley, managing director at Global Maritime Investments Ltd., which operates 64 ships, who correctly predicted a slump in earnings for larger Capesizes in March.