China's coastal coal freight rates reversed initial losses to end on a firmer note last week, after early-week abundant vessel availability weighed on freight rates.

The China Coastal Coal Freight Composite index, which tracks rates for vessels carrying coal from northern China ports to ports in the east and south, increased 4.12% from the week before to 1,043 points on April 17, according to the Shanghai Shipping Exchange. It climbed 16.96% compared to month-ago levels and 36.02% from a year ago.

Daqin railway maintenance had only minimal impact on the coastal coal market last week. Despite continued destocking at northern ports, overall inventories remained at moderate levels, keeping supply sufficient and market sentiment stable.

Coupled with mild demand during the offseason, buyers remained hesitant to accept high-priced cargoes, leading to subdued hauling. However, rising global oil prices provided underlying cost support.

Adverse weather and increased vessel queuing at northern ports constrained availability. This, along with high temperatures in southern China and shipowners holding firm on offers, contributed to a rebound in freight rates later in the week.

During the week, most shipping routes rebounded 1.0-2.6 yuan/t compared to week-ago levels. The freight rate for the 50,000-60,000 DWT vessels carrying coal from Qinhuangdao to Guangzhou port increased 1.5 yuan/t week on week to 62.4 yuan/t on April 17, while that for 60,000-70,000 DWT vessels on the same route rose 1.6 yuan/t from a week ago to 60.6 yuan/t.

Internationally, the Baltic Dry Index (BDI), tracking rates for ships carrying dry bulk commodities, stood at 2,567 points on April 17, up 16.63% compared to 2,201 points a week ago.

Amid supply constraints and geopolitical conflicts, Panamax vessels from Indonesia to China stood at $10.29/t on April 17, increasing $0.37/t from the previous week, while Supramax freight rates on the route reached $12.75/t, climbing $0.43/t compared to a week earlier. Meanwhile, Capesize vessels from Australia to China gained $0.91/t week on week to $19.84/t.

China's coastal coal freight rates are expected to soften further amid loose vessel capacity, though strong cost support may limit the downside.