Capesize freight rates continued to slump on thin physical market that dragged down the paper market further.
The Capesize 5 time charter average dropped by $210 day-on-day to $15,892 on Tuesday, due to lack of fixtures being reported.
The Baltic Dry Index (BDI) then slumped further by 1.56% or 21 points day-on-day to 1,328 readings from lacklustre shipping demand.
Slow market amid supply glut
The market outlook was poor due to thin shipping demand amid oversupply of vessels in the market.
Despite of that, Rio Tinto was heard to fix a Capesize vessel for the key west Australia and China route for late Sep laycan at around $7/wmt.
In the Atlantic market, there were too many ballasters that lowered freight rates, while most market participants remained at the sideline in waiting for clearer market direction.
Due to bearish market sentiment, some trade participants expected that the freight market had yet to find a floor amid falling rates.
Falling bunker prices fail to support freight rates
Furthermore, the weak bunker prices failed to support freight rates as VLSFO prices fell by $3.50/mt day-on-day to $320/mt at the port of Singapore.
The weak bunker prices may have followed the recent downtrend movement of crude oil prices, due to weak global oil demand.
As Bank of America predicted that oil demand will need around three years to return to pre-Covid 19 level.
There was also less market confidence on whether OPEC + will rebalance the oil market for 2020 and 2021, as Russian oil producers are keen to ramp up production once oil demand shows any signs of recovery.