Capesize freight rates continued to decline further over concerns over cargo demand and slow shipping activities.
The Capesize 5 time charter average, then dropped by $2,182 day-on-day to $44,465 on Monday, after a choppy market.
The Baltic Dry Index (BDI) then fell by $122, down 3.09% day-on-day, to $3,822, due to softening freight rates.
Bauxite concerns and thin market activity
Market sentiments turned bearish due to possible disruption to bauxite shipments as Guinea, the world’s largest exporter of bauxite came under a military coup.
The coup might divert end-users to source for bauxite through different sources like the Australian bauxites, though some trade sources cited no disruption for the bauxite cargo operations for the time being.
In the meantime, there were freight corrections in both the Pacific and Atlantic basins, due to lower cargo demand, in view of lower iron ore prices and ongoing steel cuts in China.
However, some trade participants expected some uptick in the Pacific market with tender results and fresh enquiries from the Japanese and South Korean end-users in the near term.
Bunker prices slid on lower crude prices
The bunker prices dipped in the volatile market, as the price of VLSFO inched down by $2/mt day-on-day to $542.50/mt in the port of Singapore.
There was bearish market sentiment over oil demand after Saudi Arabia implemented sharp cuts to crude contract prices for Asia.
Under the price cuts, the state-owned Saudi Aramco had reduced around $1 per barrel for its October official selling prices (OSPs) for all crude grades sold to Asia.
Some trade sources believed the price slashing move as a way for Saudi Aramco to gain more market shares in Asia but raised concerns on demand outlook due to weak economic data from China.