Capesize freight rates took a breather from recent bullish run, as trade participants went for profit-takings in the paper market.
The Capesize 5 time charter average, then fell by $810 day-on-day to $50,662 on Thursday, following the market selloff, despite good market fundamentals.
The Baltic Dry Index (BDI) followed the dip and dropped to $4,193, down 0.19% day-on-day, due to the softening freight rates.
Freight rates corrections after rally
Both the freight physical and paper market faced corrections with panic selling activities as some trade participants engaged in profit taking activities.
Despite the selloff, the market fundamentals remained firm with tight tonnage supplies and better shipping demand, amid port congestions in China.
Thus, some trade participants expected the freight correction to be temporary, unless there was more easing of the heavy congestions among Chinese ports.
The once-red hot Atlantic market also lost some steam with fewer fixtures for the key Brazil to China route for the September and October laycans.
Similarly, the Pacific freight rates slid downward with few Capesize fixtures on the Australia and Qingdao route, despite having healthy cargo list.
Bunker prices extend bullish run despite Covid demand fears
The bunker prices extended upward momentum on market optimism, as the price of VLSFO rose by $8.50/mt day-on-day to $528.50/mt in the port of Singapore.
Brent crude prices continued to climb higher on global oil recovery optimism, surpassing the $70 per barrel mark, after market concerns about the loss production from a fire incident of offshore platform off Mexico.
Some market estimated the loss of oil production at 421,000 barrels per day (bpd), however, Pemex claimed that around 71,000 bpd had been recovered, while another 110,000 barrels will come online later in the week.