Capesize freight rates slid downward on lower bookings, despite active fixtures as freight market headed for more corrections.
The Capesize 5 time charter average, then dropped by $2,245 day-on-day to $42,220 on Tuesday, after a volatile market.
The Baltic Dry Index (BDI) then fell by $115, down 3.01% day-on-day, to $3,707, due to softening freight rates.
Freight corrections amid firm market fundamentals
Freight rates came under pressure, despite several fixtures being made in the Pacific market for the key Australia to Qingdao route.
Similarly, the freight rates also fell sharply in the Atlantic market, though Vale took few vessels for October laycans for the key Tubarao to Qingdao route.
Despite the declining rates, market fundamentals remained firm with tight tonnage and healthy demand, which led some trade participants to think that the corrections were temporary after the recent rally.
There were also some market concerns over the growing ballasters passing the west of Singapore over the past two weeks, though some owners preferred to keep vessels in the Pacific.
Bunker prices rise on crude supply tightness
The bunker prices inched up on firm crude market, as the price of VLSFO inched up by $1.50/mt day-on-day to $544/mt in the port of Singapore.
However, the better bunker prices failed to support the softening freight rates but found support from the firm crude prices inching closer toward $72 per barrel.
Oil supplies might tighten in near term after market estimated 17.5 million barrels of oil had been lost due to the aftermath of Hurricane Ida and effectively cut US oil production by around 20 million to 30 million barrels.