Capesize freight rates continued to decline further due to aggressive selloff in paper market and bearish sentiment in the physical market.
The Capesize 5 time charter average fell by $1,568 day-on-day to $21,737 on Thursday, as buyers retreated from the market, while sellers chased it lower.
As such, the Baltic Dry Index (BDI) then fell by 76 points or 4.64% day-on-day to the readings of 1,561.
Capesize market drops too fast
The weak shipping fundamentals caused the Capesize to drop for the eight consecutive session due to the lack of coal cargoes from the Chinese restrictions on Australian coal imports.
Thus, most trade participants believed that the freight market had yet to find a floor yet, amid the depressed freight rates.
In the Pacific market, there was hardly any fresh enquiries but major miners like Rio Tinto and FMG continued to be active in seeking vessels to move iron ore cargoes out of West Australia to China at indicative freight range of $7.80-$8/wmt.
Similarly, the Atlantic market was muted with fronthaul trips weakening, while ship-owners started to lower offers.
VLSFO prices rise on crude inventory draw
VLSFO prices jumped by $6.50/mt to $349/mt in the port of Singapore, following bullish crude movement.
Crude oil prices received much support from crude oil inventory draw of 5.421 million recorded American Petroleum Institute (API) , which was later confirmed by Energy Information Administration (EIA) report of an inventory draw of 3.8 million barrels for the week ended at Oct 9.
Despite the inventory draw, the global oil demand continued to be affected by second wave of coronavirus outbreak that threatened economic recovery.