After a strong rally last week, Capesize rates started on a slow with some selling pressure amid the short trading week.
Thus, Capesize 5 time charter average dropped slightly by $147 day-on-day to $25,364 on Monday, after some jitters in the morning session about the strength of C3 market.
Due to the selling pressure in Capesize, the Baltic Dry Index (BDI) only rose slightly by 0.19% to 1,558 points at the start of the week.
A short trading week
The correction in paper market reflected that most trade participants adopted a wait and see approach in the market in view of Chinese holidays on the June 25-27.
Despite the short trading week, the cargo list remained healthy in the Pacific market, with mining majors like Rio Tinto and FMG as well as operators seeking for vessels in the key west Australia to China route.
Thus, the freight rate for a Capesize ship to move 170,000 of iron ore on the Port Hedland-Qingdao route was assessed at $8.85/wmt, up 15 cents/wmt from June 19.
In the Atlantic market, there was little fresh activities, but the freight rates were supported temporary fleet dislocation for the recent two weeks.
Thus, the indicative Capesize freight rate from Tubarao to Qingdao was assessed at $18.70/wmt, down $1.20/wmt from June 19.
Bunker prices dip amid market uncertainty
VLSFO prices dropped by $1/mt to $334/mt at the port of Singapore, amid oversupply and lower demand in the region.
Despite the decline in bunker prices, crude oil prices are firming with the Brent Crude prices headed toward $43 per barrel level, while the WTI moved upward toward $41 per barrel level.
Due to the upturn in crude prices, more banks are bullish on their forecasts with the Bank of America predicting the WTI to average $39.70 per barrel this year, up $7.70 from previous forecast.
The Bank of America also estimated the Brent Crude prices to average $43.70 per barrel this year from previous forecast of $37 per barrel, due to stronger-than-expected demand recovery.