Freight rates for coal vessels from loading ports in northern China to the south dropped at a faster rate this week, as shipping capacity continued to exceed demand.

On March 28, the freight rate for vessels of 50,000-60,000 DWT from Qinhuangdao to Guangzhou port dipped 7.1 yuan/t on week to 45.3 yuan/t, the biggest weekly drop since early January.

On the same day, the freight for smaller vessels of 15,000-20,000 DWT from Qinhuangdao to Ningbo port in eastern China's Zhejiang province stood at 39.5 yuan/t, down 4.6 yuan/t from a week prior.

The shipping market has been on the downward trajectory since mid-March, owing to an excess of available ships, as ship owners reentered the market following the rise in freight rates since early February.

Shipping companies also diverted ships to the domestic market from the international market amid the continued flatness in coal imports caused by the slump of domestic coal price.

Shipping demand from power plants is weakening, mainly due to uncertainties over the future market and an anticipated increase in hydropower output.