Capesize freight rates continued to slide further in choppy trading session with market concerns on cyclone development off Australia.
The Capesize 5 time charter average then dropped for the fourth consecutive days by $448 day-on-day to $23,541 on Monday, following a selloff in Asian market.
The Baltic Dry Index (BDI) also slid slightly by 0.80% on-day or 14 points to 1,740 readings, amid softening freight rates.
Cyclone concerns in the Pacific basin
Capesize freight rates went into correction mode as cargo demand became slimmer, after one of its the best rally at the start of the year.
In the Pacific basin, trade participants were waiting for the development of the Cyclone Kimi, which moved much slower-than-expected as it was supposed to make landfall at the eastern coast of Australia by Monday.
Later, the tropical Cyclone Kimi was downgraded to a tropical low by Tuesday, but still poised dangers in the flooding of the coastal regions.
Meanwhile, the Atlantic basin also faced with seasonal low cargo demand that led major miners like Vale to be in waiting mode for almost two weeks.
However, the low ballaster list provided some supports to the freight market with indicative rates for the key Brazil to China route heard around mid-$19s/wmt.
Bunker prices fall on bearish oil demand sentiment
Bunker prices dropped further on bearish oil demand sentiment, as the price of VLSFO slid by $3/mt to $449/mt at the port of Singapore.
Market participants were concerned about the global rising coronavirus cases and its negative impact on oil demand.
Slow rollout of the vaccination also drawn concerns on whether there will be a fast recovery of global oil demand during the first half of 2021.
Thus, the overall market sentiment remained pessimistic, despite the good economic indicator from China, as its GDP grew by 2.3% last year and perhaps the only major world economy to avoid recession in the coronavirus-stricken year of 2020.