Capesize freight rates rebounded on improving trade sentiment that the market had bottomed out.
The Capesize 5 time charter average then rose RMB 165 day-on-day to $15,715 on Monday, as paper market came under pressure at the start before firming later.
The Baltic Dry Index (BDI) remained flattish and rose slightly by 0.08% or 1 points to 1,284 readings on better market sentiment.
Market to bottom out
The Capesize market continued to be muted and moved slower at the start of the week. However, some trade participants expected the freight market to bottom out in near term after the slump in late-October.
Moreover, there was some market concerns over typhoons in Southeast Asia that might disrupt shipping activities in the regions and impacted vessels bound for southern China.
In the Pacific, there was decent cargo list as Rio Tinto was heard to fix a vessel for mid-Nov laycan for the key west Australia to China route.
Brazil’s Vale was also heard to be seeking Capesize vessel for mid Nov laycan to move iron ore from Malaysia to China.
In the Atlantic, the long ballaster list continued to depress market as more vessels ballasted toward Brazil from the Pacific.
VLSFO prices continues to fall despite crude oil rally
VLSFO prices were in freefall, despite recent improvement in crude oil movement as it dropped by $7/mt to $311/mt in the port of Singapore.
Crude prices rallied on better US manufacturing activity in October, as new orders grew to a 17 years-high, amid market uncertainty over the US Presidential election.
Despite the upticks, oil consultancy, Rystad Energy expects oil demand to reach 89.3 million barrels per day (bpd) in 2020, down 10.3% as compared to last year’s demand at 99.6 million bpd.
The yearly decline was due to the negative economic impact of Covid-19 in 2020, before oil demand started to recovery at 94.8 million bpd for 2021.