Capesize freight rates closed lower after the selloff in early session especially for the August and September contracts, while the Q4 contract held firm.
Thus, the Capesize 5 time charter average went down by $652 day-on-day to $17,918 on Friday, to end the week on corrections for freight rates.
The Baltic Dry Index (BDI) then dropped further by 2.44 % day-on-day to 1,481 readings on weaker freight rates.
A week of corrections
Despite some decent shipping demand in the Pacific, the freight rates were weakened by the growing spot tonnage list.
Some market participants pinned their hopes on the fresh shipping demand from Russia and Malaysia to overturn the bearish sentiments.
However, there were little activities in the key west Australia to China route which depressed market optimism as it was heard that only Rio Tinto was active in seeking vessels.
Meanwhile, the Atlantic basin was muted after a string of fixing sprees done by Brazilian miner, Vale, which was estimated to fix around 20 ships for the end-August and early September window.
Thus, market participants were more optimistic for better freight rates on the Brazil to China route as the recent fixing spree had thinned out the heavy ballasters list.
Bunker prices slide on lower global demand
VLSFO prices continued to slide on lower global bunker demand as it dropped by $2/mt day-on-day to $347/mt at the port of Singapore.
As such, Russian oil producer Gazprom Neft reported lower bunker sales dropping by 34% year-on-year to 1.05 million mt for the first half of 2020.
The lower sales were a combination of factors like the coronavirus pandemic that lowered global shipping trade.
Besides, Gazprom Neft tended to rely on its high sulfur fuel oil for bunker sales, despite VLSFO has become dominant bunker fuel after the implementation of the IMO 2020 on fuel oil sulfur limit.