Capesize freight rates slumped into losses after some panic selling in the paper market, as freight rates declined in the physical market.
The Capesize 5 time charter average, then plunged down by $994 day-on-day to $30,272 on Tuesday, after selling pressure in the paper market.
The Baltic Dry Index (BDI) also dropped by 2.18% day-on-day, down 72 points to 3,228 readings, due to the softening freight rates.
Declining freight rates from high tonnage supply
The freight market still hampered by oversupply of vessels, despite improvement in shipping demand that failed to offset the lengthy tonnage list.
Though the Pacific market had healthy cargo list, but supply had outweighed demand and resulted in falling freight rates.
Hence, most shipowners were unwilling to ballast west to the muted Atlantic market and preferred to keep their vessels in the Pacific basin, which caused heavy competition in freight rates.
Shipping activities remained bleak in the Atlantic market, though there was healthy shipping demand for iron ore and coal out of South Africa.
Bunker prices rise on firm bunker sales
The bunker prices rose on better bunker sales, as the price of VLSFO rose by $2/mt on-day to $553/mt in the port of Singapore.
In June, Singapore’s bunker sales rose by 1% month-on-month and 7.4% year-on-year to 4.1 million mt, according to the country’s Maritime and Port Authority.
In the meantime, the crude oil market grew from strength to strength over tight supply, as the International Energy Agency (IEA) expected a record-high drawdown of global oil storage during Q3.