Freight rate for coal shipment to China drops: INSA

Freight rates for the shipment of coal from Indonesia to China using Handymax and Panamax cargo vessels have declined following the plunge in the international shipping costs, Bisnis Indonesia reported Friday.

In early July, the freight tariff for the delivery of coal from Indonesia to southern part of China dropped about $3 per ton to $17 per ton from about $20 per ton in early June, according to data provided by the Indonesian National Shipowners? Association (INSA).

The association said that the freight rate for coal shipment from Indonesia to northern part of China fell 15 percent to $22-23 per ton in early July from $27 per ton in early June.

INSA estimates that the freight rates would remain the same until August because no major changes were likely to take place in the global shipping rates. ?The rate in August will remain at the same level with that in July,? said Ibnu Wibowo, an executive of the association.

Ibnu warned the freight rates could further decline as result of China having alternative coal supplies from South Africa.

Djoni Sutji, INSA's head of cooperation and international cooperation, said the ideal freight rates for trip to North China is $30 per ton, and for trip to South China $25 per ton. (*)