Capesize freight rates moved on a downward trend due to an oversupplied market amid thin shipping demand.
The Capesize 5 time charter average then slumped by $410 day-on-day to $15,482 on Wednesday, due to thin physical fixtures.
Likewise, the Baltic Dry Index (BDI) also dropped further by 2.41% or 32 points day-on-day to 1,296 readings.
Oversupply for key Brazil to China route
The Atlantic market remained oversupplied especially for the key Brazil to China route despite major miner like Vale still active in market seeking for vessel.
However, no confirmed fixture was heard for Vale and market participants expected any offers had to do lower around the $16/wmt level for the Brazil to China route amid the shipping supply glut.
Despite the healthy demand in the Pacific market, the freight rates still moved downward with Rio Tinto heard to fix a vessel for late Sep laycan done at $6.85/wmt for the west Australia to China route.
Weak bunker prices pull down freight rates
The falling bunker prices did not lift freight rates as VLSFO prices plunged further by $7/mt day-on-day to $313/mt in the port of Singapore.
Despite the falling bunker and crude oil prices, the bunker sales of Zhoushan port jumped at the expense of strict lockdown measures in Hong Kong.
According to official reports, Zhoushan’s total bunker sales surged up by 57% year-on-year to 420,000 mt of bonded bunker fuel in August.
The high bunker sales volume was also attributed to tax rebates on fuel oil which encouraged oil refiners to rise production that made bunker prices more price competitive.