Capesize paper market continued to run out of the steam and fell for the third consecutive day amid bearish market sentiments.
Thus, Capesize 5 time charter average dropped y by $394 day-on-day to $8,531 on Thursday, after it came under pressure in morning session that set the tone for the rest of trading day.
The decline was in line with falling rates in the physical market at both the Pacific and Atlantic basins with little fixtures being done.
Weak trend in the Pacific
The low freight rates reflected a standoff between owners and charterers, according to trade sources.
Despite the weak freight rates, there were still some decent cargoes out of the Pacific with much enquiries on iron ore shipments.
Mining majors were still in the market with Rio Tinto heard to have concluded a Dampier to Qingdao fixture basis May 11-13 laycan at $4.00/wmt, while BHP was also heard to fix similar laycan but at around $4.15/wmt.
Better demand in Brazil route
Similar standoff between shipowners and charterers were seen the key Brazil to China route as well.
Nevertheless, mining major Vale continued to seek out vessels for the Tubarao to Qingdao route for May 10-30 laycan with bid heard at $10s/wmt level.
Better weather in Brazil and supply tightness of Brazilian fines among the Chinese mills might encourage more fixtures ahead.
Thus, most trade participants expect a noticeable increase of Vale’s products to hit Chinese shores at least until the second half of May.
Stronger bunker prices fail to rally freight market
VLSFO bunker prices rebounded by $22.50 to $229/mt in the port of Singapore but failed to turn around the spot freight market.
Some trade sources expect further drop of VLSFO due to competitive prices offered by other ports in the region.
For instance, China’s Zhoushan port had offered VLSFO at a record discount to Singapore’s levels of $31.50/mt since the start of week.
Besides, the crude prices recovery was still at its infancy after the recent wild swings, and might not find the bottom yet as COVID 19 is believed to slash oil demand as much as 20-30 million barrels per day, against the OPEC + output cut of 9.7-10 million barrels per day.