Capesize freight rates plunged again after the recent rebound as bearish sentiment took over the freight market.
The Capesize 5 time charter average then dropped by RMB 270 day-on-day to $15,445 on Tuesday, following a negative index.
The Baltic Dry Index (BDI) also came under pressure and dropped by 1.64% or 21 points to 1,263 readings.
Supply glut in the market
There was high number of ballasters heading toward the Atlantic market from the Pacific, which dragged down freight rates amid thin shipping activity.
There was also a standoff among shipowners and charterers that pointed to lower market confidence for fixtures during the months of November and December.
Due to the decline, some trade participants held more bearish market outlook and expect further freight rate corrections ahead.
The decent cargo list of the Pacific market did not lift market sentiment as market participants were concerned over slowing steel demand during winter season.
VLSFO prices jump in response to crude oil rally
VLSFO prices rallied by $23.50/mt to $334.50/mt in the port of Singapore, due to the jump in crude oil price movement.
Crude prices rallied as OPEC + and Russia are considering to extend the easing of the production cuts from January 2021 to March 2021, in view of bearish oil demand brought by second wave of the pandemic.
Thus, Brent crude oil jumped toward the $40 per barrel, while WTI crude oil rose toward the $38 per barrel level.