Capesize freight rates extended losses over sluggish demand and vessel oversupply, though some demand improvement was seen in the Pacific market.
The Capesize 5 time charter average, then fell by $755 day-on-day to $6,180 on Tuesday, due to the thin shipping activities.
The Baltic Dry Index (BDI) also dipped by $48, down 3.45% day-on-day, to $1,343, due to weakening freight rates.
Weak fundamentals lead to bottoming of freight rates
Freight rates suffered under weak market fundamentals and plunged down lower, which resulted some trade participants to anticipate that rates might hit bottom soon.
Moreover, Capesize freight rates also faced competition from Panamax and Supramax vessels that reduced the profitability, except gaining some premium from scrubber-fitted vessels that were resistant toward high bunkering prices.
Nevertheless, the Pacific market had been attracting steady stream of demand for moving iron ore and coal recently, though the Atlantic market was muted with more supplies overshadowing the minuscule shipping demand.
Bunker prices slide on volatile market
The bunker prices dipped from recent rally, as the price of VLSFO went down by $5.00/mt to $685.50/mt in the port of Singapore.
The price movement followed the volatility of the crude oil market, with imminent military conflict between Russia and Ukraine that are likely to result in price spike.
Meanwhile, the oil demand in China seemed to be waning as the country added only 170,000 bpd to its strategic and commercials reserves in 2021, which was considered trivial, and a far cry compared to adding of 1.26 million bpd during 2020.