Capesize freight rates moved flatly with some improvement in the physical market, which led some trade participants to believe that the market had found the bottom.
The Capesize 5 time charter average, then dipped slightly by $24 day-on-day to $31,856 on Wednesday, despite increase of shipping activities in the physical market.
The Baltic Dry Index (BDI) also went down slightly by 0.38% day-on-day, or 12 points to 3,154 readings, due to softening freight rates.
Rebounding Pacific to drive up the market
Fresh cargoes enquiries had firmed up the Pacific basin with better rates as the market settled down at the aftermath of typhoon impact.
Demand had returned after the typhoon disruption, which strengthened market confidence with the increase of shipping activities as trade participants believed that the market had bottomed out.
However, the market recovery remained slow in the Atlantic basin, though market participants expected better demand from miners to improve the fundamentals.
Bunker prices rise higher on better crude market
The bunker prices continued its upward momentum, as the price of VLSFO went up by $1/mt day-on-day to $548/mt in the port of Singapore.
The bunker market drew strength from the firm crude oil market as Brent crude prices buoyed around the $75-76 per barrel level, after falling US inventories.
Market participants also expected more bunker demand in Europe as UK allowed the restart of international cruises for vaccinated customers in August.
So far, the cruise industry accounted around 4% of bunker demand in the pre-Covid period but came into a standstill during the pandemic.