Capesize freight rates extended losses with market selloff over prolonged period, amid bearish market sentiments.
The Capesize 5 time charter average, then fell by $4,359 day-on-day to $70,181 on Thursday, following market selloff for sixth consecutive trading day.
The Baltic Dry Index (BDI) continued to slip by $144, down 2.77% day-on-day, to $5,062, due to softening freight rates.
Freight rates drop on underperforming fixtures
Freight rates edged lower on Pacific and Atlantic markets with scant fixtures and lower offers, despite some healthy demand to move coal cargoes.
There was also more resistance from shipowners as many trade participants believed that the declining freight rates had yet to find a floor yet.
Major miners were also slowed in taking vessels, probably reacting to recent corrections of iron ore prices, and Rio Tinto’s announcement to cut iron ore shipments in 2021, due to operational issues.
Bunker prices soar from robust crude prices
The bunker prices rose further on robust crude prices, as the price of VLSFO hiked up by $9.50/mt to $618/mt in the port of Singapore.
Global power crunch had kept Brent crude prices toward $85 per barrel, which led more bank institutions to join the bandwagon for raising price forecasts for the commodity.
Many trade participants expected crude oil demand to spike further with power plants switching from gas to oil for electricity generation. Plus, the lack of upstream investment in oil supply over recent years might boost prices over a sustained period.