Capesize freight rates softened as trading activities slowed down ahead of Golden Week holidays.
The Capesize 5 time charter average then dropped by $445 day-on-day to $23,733 on Monday, due to the market cooldown.
Then, the Baltic Dry Index (BDI) dipped by 0.78% or 13 points day-on-day to 1,654 readings due to the correction of freight rates.
Cooldown time ahead of Golden Week holidays
The trading volumes seemed to cool off ahead of the National Day holidays in China for the Oct 1-10 period.
Thus, some corrections were expected for the week, given the recent rally of freight rate upward movement over the short span of time.
As such, the shipping demand had slowed in the Pacific market, with only major miner, Rio Tinto remained active in the market. The miner was heard to fix two Capesize vessels for the west Australia to China route for mid-October laycan.
Meanwhile, there was a standoff between shipowners and charterers in the Atlantic market which did not resulted any fixtures for the key Brazil to China routes.
VLSFO prices fall over market uncertainties
VLSFO prices dipped by $2.00/mt day-on-day to $333.50/mt at the port of Singapore, due to low bunker demand.
It was estimated that the coronavirus pandemic had wiped out around one tenth of the oil demand for 2020, and so far, the recovery had been slowed to get back to pre-crisis level.
According to Russia’s Energy ministry, the oil producing companies had cut their production by around 25-30% due to the pandemic.
Moreover, there were more bearish market sentiments on Q4 demand due to uncertainties about a second wave of COVID-19 and renewed restrictions in Europe.