Capesize freight rates slumped after recent rally, as some ships wanted to get covered before the weekend amid market volatility.
The Capesize 5 time charter average, then dropped by $1,662 day-on-day to $13,598 on Thursday, despite support from the high bunker prices.
The Baltic Dry Index (BDI) also decreased by $33 day-on-day, or down 1.54% day-on-day, to $2,104, due to weakening freight rates.
Freight rates correct after rally
Freight rates faced corrections after a bullish run, though market outlook remained positive in view of healthy demand in the Pacific and better weather in Brazil that raised the demand of moving iron ore out of Brazil.
Besides iron ore shipments, there was also more demand in moving coals toward Europe, perhaps due to European countries tried to reduce their energy dependency on Russian gas in retaliation for the invasion in Ukraine.
Meanwhile, the rainy season seemed to have ceased in Brazil, providing favourable condition for mining and logistic operations that boost iron ore exports.
However, the ballasting list was long as many vessels headed toward Brazil from the Black Sea to avoid the military conflicts there.
Bunker prices soar to record high levels on Ukraine crisis
The bunker prices rallied further on record-high crude price levels, as the price of VLSFO jumped by $54/mt to $904.50/mt in the port of Singapore.
The astronomical price upticks highlighted market concerns on the escalating Russia-Ukraine conflict, which affected bunkering services off Black Sea regions, where many commercial vessels had been damaged by the fighting there.
For instance, the bunkering demand of Istanbul, Turkey had been halved since the outbreak of the military conflict, as trading and bunkering ships avoided the regions altogether.
So far, the Turkish bunkering market had recorded around 2.6 million mt of bunker sales last year, and this year volume was likely to drop further in view of the ongoing war in Ukraine.