Capesize freight rates dipped for slight correction as the physical market continued to soften on scant shipping activities.
The Capesize 5 time charter average fell by RMB 525 day-on-day to $12,854 on Thursday, as freight rates came under pressure on bearish market sentiment.
The Baltic Dry Index (BDI) then dropped by 1.49% or 17 points to 1,124 readings on weakening freight rates.
Standoff between shipowners and charterers
Due to the market uncertainty, there was a standoff between shipowners and charterers, as trade participants searched for clearer market directions.
There was still an absence of coal shipments in the Pacific except for some South Korea-bound cargoes, due to Chinese informal import ban on Australian coals.
Mining majors like Rio Tinto and FMG were heard to be seeking vessels to move iron cargoes for late November laycan, but nothing was concluded.
Meanwhile, the Atlantic market suffered from a long ballaster list off Brazil, which depressed freight rates amid the oversupplied market.
Bunker prices under pressure from bearish oil outlook
VLSFO prices plunged by $5.50/mt to $363/mt in the port of Singapore, due to bearish market outlook on oil demand.
Due to the high global cases of Covid-19, the U.S. Energy Information Administration (EIA) foresees Brent Crude prices to average $40.16 per barrel in 2020, then $46.69 per barrel in 2021.
Likewise, the WTI Crude prices are slated to average $38.24 per barrel for this year and $44.21 per barrel for next year.
The low oil price forecast was due to lesser oil demand from rising coronavirus cases and the return of crude oil output from countries like Libya.