Capesize freight rates continued to tumble down in the oversupplied market, while both basins posted lower fixtures throughout the week.
The Capesize 5 time charter average then dropped by $890 day-on-day to $16,748 on Thursday, due to long liquidation in the market.
The Baltic Dry Index (BDI) then dropped further by 3.46% or 50 points day-on-day to 1,395 readings due to softening of freight rates.
Selloff in the market
The recent selloff in the paper market may have encouraged a similar selloff in the physical market, amid the oversupplied market.
According to trade sources, there were two miners namely Rio Tinto and Vale that were active in the market, which formed a thin demand base amid supply glut of vessels.
As such, Rio Tinto was heard to fix a Capesize ship at $7.30/wmt to move iron ore from Port Dampier to Qingdao, while Vale was heard to have fixed at least two Capesize ships for iron ore loading from Tubarao to Qingdao for Sep 24-30 laycan at $16.80/wmt.
In the meantime, some market participants were concerned about the two typhoon development in East Asia, which might disrupt shipping activities in the region.
Bunker prices plunge on market uncertainty
VLSFO prices slumped to sharp dive with loss of $16.50 day-on-day to $334/mt at the port of Singapore, following softer crude oil price movement.
Brent crude oil prices slid back toward the $44 per barrel after recent rally, while the WTI crude prices also dropped toward $41 per barrel.
The slump in oil prices was against positive market news of lower unemployment rate in the US and good progress for the Covid-19 vaccine.
Perhaps, the market uncertainty stemmed from weakening commitment of the OPEC + to maintain output cuts in view of the gradual recovery of global economy.