In July, China experienced a wide range of high-temperature weather. The daily coal consumption of power plants rose to a high level, and downstream purchases gradually increased. In addition, typhoons affected a large area, leading to the implementation of shipping control on the Yangtze River waterway. Southbound ships were blocked from passing, resulting in a decline in turnover efficiency and a tightening of available market shipping capacity. Shipowners' confidence was boosted, and the coastal bulk cargo composite index continued to rise. On July 31, the coastal (bulk cargo) composite freight index released by the Shanghai Shipping Exchange closed at 1225.04 points, an increase of 10.2% from the end of last month. The monthly average value was 1146.03 points, a month-on-month decrease of 8.4%.
1. Coal Transportation
In terms of market demand, the widespread high temperature weather across the country has driven up residents' air conditioning load, and the daily coal consumption of coastal power plants has steadily risen. However, with the accelerated fulfillment of long-term contract coal and the supplement of imported coal, the inventory destocking of power plants has been slow. The daily coal consumption of eight coastal provinces has increased to 2.269 million tons, and the number of available days for coal stock has decreased. In terms of coal prices, the high-pressure safety supervision situation in major producing areas continues. After completing their monthly production tasks, coal mines in many regions have concentrated on reducing and suspending production, leading to a tight supply of coal in producing areas and a steady rise in pithead coal prices. In the first ten days, the Meiyu in the south delayed the arrival of high temperature. In the early stage, downstream power plants had sufficient coal reserves and only maintained rigid transportation of long-term contract coal. Coupled with the weakening market trend at northern ports and the inverted shipping price from producing areas to ports, traders stopped gathering coal, resulting in sluggish inbound and outbound operations at Bohai Rim ports. In the middle and late ten days, the national high temperature hit, power plant daily consumption climbed and a small amount of stock was replenished, and port coal prices stopped falling and rebounded. In terms of freight rate trends, affected by high temperature weather, terminal stock replenishment demand was released. Meanwhile, Typhoon Bavi and Typhoon Nuri landed along the coast, causing port suspension of navigation and ships to anchor for shelter, which affected the turnover efficiency of ships and tightened the spot available运力 in the market. At the same time, the escalation of geopolitical conflicts pushed up international sea freight rates, thereby weakening the cost-effectiveness of imported coal, and coastal coal freight rates rose sharply. On July 31st, the coal cargo freight rate index released by the Shanghai Shipping Exchange closed at 1295.07 points, an increase of 13.4% compared with the end of last month. The monthly average was 1191.74 points, a month-on-month decrease of 10.5%. On July 31st, in the China Coastal Coal Freight Index (CBCFI) released by the Shanghai Shipping Exchange, the market freight rate for the route from Qinhuangdao Port to Zhangjiagang (40,000-50,000 dwt) was 46.9 RMB per ton, an increase of 20.7 RMB per ton compared with the end of last month. The monthly average was 40.6 RMB per ton, a month-on-month decrease of 5.4 RMB per ton. For the South China route, the market freight rate for the route from Qinhuangdao Port to Guangzhou (60,000-70,000 dwt) was 48.7 RMB per ton, an increase of 11.6 RMB per ton compared with the end of last month. The monthly average was 45.8 RMB per ton, a month-on-month decrease of 11.3 RMB per ton.
2. Transportation of Metal Ores
This month, affected by high temperatures and rainfall in the southern regions, large-scale outdoor civil engineering construction came to a standstill. The terminal spot transaction volume of steel products remained at a low level within the year, with the off-season characteristics becoming prominent, and the apparent consumption of rebar continued to decline slightly. Factory inventories of steel mills kept accumulating, and the pace of destocking in social inventories slowed down significantly. Dragged by weak demand, steel prices maintained a volatile trend at low levels. As steel mills' losses continued to expand and blast furnace maintenance increased, the output of rebar declined slightly, and the molten iron output dropped remarkably. Meanwhile, overseas iron ore shipments fell sharply after the end of the volume rush at the end of the season. Domestic arrival volume decreased significantly due to weather factors. Coupled with steel mills' production cuts weakening the demand for raw material procurement, iron ore saw a pattern of weak supply and demand, and the pace of inventory accumulation at ports slowed down. In the transportation market, affected by Typhoon Bavi, a large number of ships dropped anchor to take shelter. The number of ships waiting at ports rose, port unloading operations were hindered, and the turnover efficiency of ships declined. The overall运力 in coastal areas was tight, shipowners' sentiment to support prices ran high, and the coastal metal ore freight rates fluctuated and moved up. On July 31st, the freight rate index for the metal ore cargo category closed at 1133.23 points, an increase of 4.8% compared with the end of last month. The monthly average value was 1075.31 points, a month-on-month decrease of 6.9%.
3. Grain Transportation
This month, grain stocks in Northeast China at the grassroots level were exhausted at the beginning of the month. Wheat harvesting in North China was completed, and traders emptied their warehouses to sell grain, leading to an increase in circulating grain sources in the market. However, downstream breeding continued to suffer losses, wheat had a obvious advantage in replacing corn, and deep-processing enterprises carried out seasonal shutdown and maintenance, making it difficult to boost corn demand. In the middle and late ten days, affected by high temperature and humid weather, there was a risk of mildew in existing corn stocks. Traders concentrated on accelerating shipments, coupled with the expectation of new corn coming to the market, corn supply was sufficient and prices continued to weaken. In terms of the transportation market, port inventories were relatively high and purchasing and sales were sluggish in the early stage, putting pressure on freight rates; subsequently, the amount of corn used for feed substitution in southern China decreased, port corn prices remained stable, grain trade transactions gradually became active, and transportation demand recovered. Coupled with the impact of typhoons, the turnover efficiency of ships declined, and coastal transportation capacity was generally delayed, driving a significant rise in coastal grain freight rates. On July 31st, the grain freight index closed at 1268.8 points, an increase of 11.4% compared with the end of last month. The monthly average was 1190.59 points, a month-on-month decrease of 11.9%.
4. Transportation of Crude Oil and Petroleum Products
International crude oil prices rebounded sharply this month, and the public's willingness to travel has increased, leading to an overall positive demand for gasoline. As for diesel, multiple regions were hit by heavy rainfall, typhoons and continuous high temperatures within the month, which restricted the operation of outdoor oil-using enterprises. Meanwhile, summer agriculture entered a fallow period, resulting in a sharp shrinkage of demand for agricultural machinery oil, and the overall demand for diesel was sluggish. On the supply side, major refineries further increased their operating rates, while independent refineries operated at a low capacity, leading to a slight increase in the supply of refined oil products. The coastal refined oil freight rates rebounded slightly from their bottom. On July 31st, the refined oil freight index released by the Shanghai Shipping Exchange was 1331.61 points, an increase of 5.2% from the end of last month; the crude oil freight index was 1621.71 points, an increase of 1.0% from the end of last month.
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