Panamax rates plunge on weak China coal demand

[LONDON] Record production of hydropower from China's Three Gorges and newer dams is displacing so much coal that rates to transport it have plunged to about record lows, roiling the shipping market.

Daily earnings for Panamaxes, vessels that are about 750 feet long and get most of their spot cargoes from hauling coal, slumped as much as 76 per cent this year, getting to within US$26 of an all-time low.

China started hydroelectric plants this year with enough generation to replace 26 million tonnes of coal, or about 370 cargoes, data compiled by Bloomberg show. The extra power means less imports and weaker freight rates, Morgan Stanley estimates.