Capesize freight rates took a slight dip despite a bullish physical market run with better rates for the Brazil routes.
Thus, the Capesize 5 time charter average went for slight correction and fell by $121 day-on-day to $18,775 on Thursday.
Then, the Baltic Dry Index (BDI) followed the dip and went down by 0.33% day-on-day to 1,504 readings.
Weakening Pacific freight rates
The drop in paper market reflected softening freight rates in the Pacific market due to limited trading, as it was heard that only one major miner, Rio Tinto was active in the market.
Trade participants were concerned that the recent rally had depended too much on the strength of iron ore trade, while the demand for coal shipping had weakened significantly due to lack of import quotas for the Chinese traders.
The Atlantic market, however, saw its rate rising amid a lengthy tonnage list. This was due to higher bids for the end-September and early October laycans for the key Tubarao-to-Qingdao route that lifted market sentiments.
Bunker prices dip despite crude support
VLSFO prices slipped by $1.50 day-on-day to $351.50/mt at the port of Singapore, despite the recent firmer crude oil prices movement.
Perhaps, the market participants were worried that some of bunker demand will shift away from city-state to Chinese port of Zhoushan, where major miners expanded their operation.
Both Vale and Rio Tinto announced the opening of their iron ore processing facilities in Zhoushan this week, which may attract a bigger bunker market share for the region.