Capesize freight rates dropped on thin market activities amid bearish market sentiment in shipping demand.
The Capesize 5 time charter average fell by RMB 514 day-on-day to $14,177 on Thursday, as low Atlantic fixtures weighted on prompt paper market.
The Baltic Dry Index (BDI) then slipped by 2.45% or 30 points to 1,194 readings, due to softening Capesize freight rates.
Slow Q4 ahead
Market pessimism loomed over Q4, as some trade participants doubted whether miners will increase iron ore shipments to fulfil their annual guidance amid slow steel demand in China.
For instance, most of Western Australian ports had completed scheduled maintenances and should be increasing their shipments. However, trade sources noted that there had not been sharp surge in shipments yet as seen in previous years.
Thus, there was muted shipping activities in the Pacific market, with no confirmed fixtures heard being done.
However, there was some market talks of Vale seeking vessels to move iron ore from Malaysia to Vietnam for the second half of November laycan.
On the contrary, there were more shipping activities in the Atlantic market, with some market enquiries to ship the US and Canadian coals.
However, the shipping freight rates continued to be depressed with long ballaster lists, as around 38 ballasting vessels were estimated to arrive in Brazil from the Pacific by early December.
VLSFO rises despite bearish crude movement
VLSFO prices rose by $5/mt to $339/mt in the port of Singapore, despite downtrend crude oil price movement.
Crude oil prices moved south after recent rebound, following market uncertainty over the undecided US elections and rising coronavirus cases that dampened oil demand.
Due to the bearish market sentiment, Platts expects lower sales of low sulfur bunker fuel oil for October at the port of Singapore.
However, there might be uptick of sales for high sulfur fuel oil, in view of bunker calls at the port by scrubber-equipped ships.