Capesize freight rates fell on thin market activities, amid facing fierce competition from Panamax and Supramax cargo stems.
The Capesize 5 time charter average, then dropped by $1,157 day-on-day to $7,390 on Friday, due to the scant shipping activities.
The Baltic Dry Index (BDI) also dipped by $594, down 4.00% day-on-day, to $1,415, due to weakening freight rates.
Lackluster demand amid growing supply
Freight rates moved downward in line with a traditional weak quarter after holidays season with wet weather in Brazil and Australia.
More vessels also entered the market with the easing of port congestion in China, which drove freight rates to a record low with lesser coal and iron ore shipping demand.
Furthermore, Capesize vessels were competing with other classes like Panamax and Supramax to move cargoes in the scant market demand environment, amid higher bunker prices that resulted spot Capesize rates to come under operating costs.
Bunker prices correct after recent rally
The bunker prices dipped from recent rally, as the price of VLSFO went down by $6.00/mt to $687.50/mt in the port of Singapore.
The recent price upticks of VLSFO had reached almost three-years high toward the $700/mt mark, since the introduction of the marine fuel in 2019, due to support of the strong crude prices.
However, the high crude and bunker prices might become potential headwinds to economic recovery and affected freight rates with higher fuel costs.