Capesize freight rates were on correction phrases and the paper market was on a selloff due to bearish sentiment.
Thus, the Capesize 5 time charter average fell by $2,028 day-on-day to $29,479 on Friday, after aggressive selloff before finding some supports at the lows of the trading day.
The Baltic Dry Index (BDI) then dropped by 78 points or 3.96% day-on-day to the readings of 1,892.
More freight corrections to come
Both the Pacific and Atlantic markets were extending losses, while some trade participants expected some stability in near term due to Brazil’s Vale trying to make up for lost shipments in Q4.
It was heard that Vale was trying to fix for early-Nov laycans shipment, but the freight rates were lowered by the long ballaster list.
As such, the indicative freight rate on the Brazil to China route was in the range of $19/wmt to $20/wmt level.
Other than that, some trade participants expected further correction on freight rates due to the scant activities in the Capesize market.
VLSFO prices rise on lower crude output
VLSFO prices rose by $1/mt to $344.50/mt in the port of Singapore, following the rebound of crude prices on tighter supply.
Oil production came under scrutiny due to outages like Hurricane Delta, workers strikes in Norway, and Saudi Arabia to seek for deeper output cuts.
However, some of the supply’s issues had seen some improvement like the ending of the worker strikes in Norway as well as the aftermath of Hurricane Delta that may restart some oil production at the Gulf of Mexico.
Market participants were also concerned about the upcoming US Presidential Election, which if Joe Biden become the next President, he may reestablish relationship with Iran and allowed the country to sell around 1 million barrels per day of crude oil to the global market.