Capesize freight rates dipped on selling pressure after the recent uptick in the physical market.
Thus, the Capesize 5 time charter average fell by $725 day-on-day to $17,881 on Wednesday, after a fresh wave of selloff in the market.
The Baltic Dry Index (BDI) went with the dip and dropped by 2.05% or 29 points to 1,384 readings.
Cooling off after recent uptick
The market seemed to cool down after a series of fixtures done earlier in the week. This sentiment was reflected in the selloff in freight forward agreement (FFA) market due to lower Brazil fixtures.
Nevertheless, there was decent cargo list in the Pacific market to support freight rates, as Rio Tinto was heard to fix several vessels for early November laycan for the west coast Australia to China route at high-$7s/mt.
Meanwhile, Brazil’s Vale was heard to secure some vessels for the first half November laycan at high $15s/mt for the Tubarao to Qingdao route. Besides Vale, there was also other fixtures being done by ship operators for similar route.
VLSFO prices fall on bearish outlook
VLSFO prices slipped further by $3/mt to $322.50/mt at the port of Singapore, following bearish market sentiment on oil demand.
Oil supply glut was aggravated further by high US crude stockpiles, which recorded an inventory increase of 4.3 million barrels for the week ended at Oct 23, as compared to the decline of 1 million barrels last week.
To prevent an oversupplied market, the OPEC + were heard to consider postponing the easing of production cuts in January 2021 as scheduled, in view of weakening oil demand.