Capesize freight rates came under pressure on bearish market sentiment and oversupplied shipping market.
The Capesize 5 time charter average then dropped by RMB 754 day-on-day to $14,691 on Wednesday, following the selling pressure in the market.
The Baltic Dry Index (BDI) then slipped by 3.09% or 39 points to 1,224 readings on weaker Capesize freight rates.
Low market confidence in freight market
The declining freight rates were attributed to market concerns over high spot tonnage supply that outweighed shipping demand.
The long ballast list off Brazil continued to depress rates in the Atlantic market, and more vessels were expected to head toward Brazil, due to stricter COVID-19 measures imposed in the Pacific ports.
Meanwhile, the Pacific market experienced thinner shipping activities from the lack of coal demand off Australia due to the Chinese informal ban on Australian coal imports.
Nevertheless, some vessels were heard to be fixed by mining majors like FMG and Rio Tinto to move iron ore for the west Australian-China route but at lower rates around $7/wmt.
VLSFO sees slight correction after rally
VLSFO prices dipped slightly after the recent huge jump in bunkers prices, as it went down by 50 cents to $334.50/mt in the port of Singapore.
The bunker prices decline was despite the recent rally in crude oil prices, following an almost ten-month drop in US weekly crude oil exports to 2.3 million bpd last week, while oil production also fell by 600,000 bpd to 10.5 million bpd.
Due to the lower supply, the Brent crude oil prices maintained around $40 per barrel level, while WTI crude oil at the $38 per barrel level.