Capesize freight rates reversed into drop on thin shipping activities, amid some improvement in the physical market.
The Capesize 5 time charter average went down slightly by $91 day-on-day to $12,621 on Monday, after a slow start to the week.
The Baltic Dry Index (BDI) then dropped by 0.24% or 3 points to 1,227 readings, due to weaker freight rates movement.
Slowdown in shipping activities
Despite the dip, there was still healthy cargoes list in both basins, while iron ore prices just reached record-high level, due to robust steel demand in China.
However, the shipping momentum seemed to slow down in the Pacific market with a decent TCE premium over fronthaul trips, while ship-owners were reluctant to ballast ships, which could depress freight rates further in the region.
Meanwhile, the shipping activities also started the week at a slower pace for the Atlantic market, as trade participants were in no rush to conclude fixtures.
Many of them prefer to wait for clearer market direction before making any commitment, while they were also concerned over the long ballast list on the key Brazil to China route.
Bunker prices inch down on supply glut
In the meantime, the high bunker prices continued to support freight rates, though the price movement came down for a while, following the recent declining crude oil prices movement.
Thus, the VLSFO went down by $2/mt to $379.50/mt at the port of Singapore, due to the oil supply glut.
As the recent vaccines-inspired oil rally was cut short by the oversupplied oil market, as OPEC + posted higher oil production volumes with some market estimated at a glut of 200 million barrels by 2021.