Capesize freight rates headed down the curve, after another round of discounting in both basins, without much improvement in the physical market.
The Capesize 5 time charter average fell by $2,192 day-on-day to $23,305 on Wednesday, due to bearish sentiment on the physical side.
With freight rates dropping everywhere, the Baltic Dry Index (BDI) then dipped by 95 points or 5.49% day-on-day to the readings of 1,637.
Too much reliance on China routes
Trade participants were depressed by the market talk of the ban on Australian coal shipments that led to recent freight rates correction.
As such, the Platts Time Charter Equivalent spread between the key Brazil and West Australia round trips had narrowed to about $2,000/d level.
The Atlantic market had moved toward a backwardation as the Capesize market was too dependent on China-bound routes, while the recent second wave of coronavirus outbreak in Europe had forestalled the recovery of Tran-Atlantic shipping demand.
Meanwhile, there was some fresh enquiries in the Pacific market, as mining majors seek for vessels to more iron ore cargoes for late Oct and early Nov laycan.
For instance, Rio Tinto was heard to fix around two ships for the west Australia to China route at the indicative range of $ $8.10-$8.50/wmt.
VLSFO prices slide on easing of crude output
VLSFO prices fell by $1.50/mt to $342.50/mt in the port of Singapore, due to lower crude oil prices movement.
OPEC+ and Russia will continue to ease output cut on January 2021 as planned, in regardless of the rising coronavirus cases, caused by the second wave of coronavirus outbreak.
This caused the Brent Crude oil prices to drop toward the $42 per barrel level, while WTI Crude slid toward the $40 per barrel level.
However, there was some upside in the market with report of American Petroleum Institute (API), citing a weekly drop of US crude inventories but this was yet to be confirmed by the report from Energy Information Administration (EIA) issued out later in the week.