Capesize freight rates fell further on aggressive selloff in the market, due to softening paper and physical market.
The Capesize 5 time charter average then dropped by $2,100 day-on-day to $15,781 on Thursday, after a bloodbath in the paper market.
The Baltic Dry Index (BDI) also followed the downtrend and dropped by 6.29% or 87 points to 1,297 readings.
Volatile freight market
The market cooldown turned into freefall as key route like the Brazil to China was depressed by long list of ballasters for November arrival.
Even though, Brazil’s Vale managed to fix several vessels for second-half November and early December laycans, but it was still not enough to clear the long ballaster list. Thus, the indicative freight levels on the Brazil to China route were heard in the range of $15.00-15.50/wmt.
On the contrary, the Pacific market seemed better on decent cargo list, but the freight rates continued to come under pressures from lower transaction levels.
Rio Tinto was heard to fix few vessels for west Australia to China route for early November laycan with indicative freight heard at the range of $7-$7.25/wmt.
VLSFO prices drop further on lockdown concerns
VLSFO prices followed the crude oil price slump and offered little support for the falling freight rates as it dropped further by $2.50/mt to $320/mt in the port of Singapore.
Market participants were concerned about lower oil demand as lockdown measures were implemented in France and Germany, two of European largest economies till the end of November.
Moreover, there were some cracks among the OPEC+, as some members were heard not to support the extension of output cuts of 7.7 million barrels per day into next year.