Capesize market seemed to dive to a new low with each passing days, prompting trade participants to think if the market has bottomed or another V-shape recovery is around the corner.
Gone are the heydays of the boom days when spot cape was trading high toward $200,000 per day in the 2008 and instead the freight rate dropped almost 100-fold to sub $2,000 level.
As such, the Capesize 5 time charter average recorded at $1,992 on Thursday, down slightly by $40 on-day.
With the decline of Capesize, the Baltic Dry Index (BDI) dropped to a low rating of 393 by end of the week, prompting market doubters if the index will dive to new records low since Feb 2016 at 291 reading.
Ballasters glut in the Brazil to China route
The finger pointing game seemed to blame at the weak Atlantic market, where the list of ballasters remained lengthy for May and first-half June dates.
So far, Anglo-American was heard to fix a vessel for the key Brazil to China route for June 6-10 laycan in the high-$6s/wmt. But other than that, the market was rather quiet.
According to shipbroker SSY, Brazil shipment to Europe have fallen to the lowest since at least 1997, while the loading from Brazil to Japan, South Korea and Taiwan had fell to a 7.3% share of overall exports last year.
Based on their data, the key Brazil to China route did not fare better in Q1 2020 as well, as China’s imports from Brazil fell to 50.7 million mt in Q1, down 10 million mt year-on-year.
Bunker prices slide despite oil rally
VLSFO bunker prices edged down by 50 cents to $242/mt at the port of Singapore, despite gains in the crude oil price movement.
Brent crude prices went up toward the $32 per barrel level, while the WTI saw slight gains to $28 per barrel, as Aramco cut 30% of its oil export to Asian buyers in June.
Moreover, the oil price rebounded were led by International Energy Agency (IEA) forecast of lower global stockpiles in the second half of 2020.
Furthermore, market optimism was supported by U.S. crude inventories falling for the first time in 15 weeks, with the stockpiles 531.5 million barrels, down 745,000 barrels for the week ended on May 8.