At least 30 Panamax vessels of unsold coal cargoes float off China’s coast

The situation is really very bad and is getting worse,” one industry source said.

Valarie Jackson at Platts has some rather bad news for Australian Dollar?

At least 30 Panamax or Capesize vessels are floating off China’s coast because traders who bought them have been unable to resell them to end-users, two industry sources said Tuesday at a conference in Indonesia.

The numbers of vessels that will run on demurrage at the expense of at least 10 Chinese coal traders who bought the cargoes from international trading companies and coal producers from the US, Colombia and Indonesia is expected to increase over the next few weeks, the sources said in interviews on the sidelines of the Coaltrans Asia conference in Bali, Indonesia.

A source from South Korea said he is surprised about the number of vessels that cannot discharge coal in various ports in China, saying he was previously aware that there were only 12 such vessels lying in wait.

Chinese traders who bought and already paid for the coal from the international shippers and producers are now desperately trying to re-sell the cargoes to Chinese end-users or to other north Asian coal buyers whose company does not require a tender process before it can buy coal cargoes, the industry source said.

The South Korean source said he believes at least one Korean power utility recently launched a tender to take advantage of the low prices for unsold cargoes off the Chinese coast, which will most likely be offered in Korea.