Capesize freight rates continued to head south on selling pressure on the paper market and thin physical trading market.
The Capesize 5 time charter average fell by $2,146 day-on-day to $27,333 on Monday, due to aggressive selloff, but gained some ground as Pilbara port authorities were turning away covid infected crews.
The Baltic Dry Index (BDI) then dropped by 85 points or 4.49% day-on-day to the readings of 1,807.
Ban on Australian coal imports
The coal shipment from Australia took a hit from the worsening political tension between Australia and China, as Chinese mills received verbal notices not to import Australian coals.
There was no official announcement yet and trade participants were still waiting for more clarity on this issue that affected Capesize freight rates.
Thus, market sources expected more Australian coal shipments to head toward South Korea and India, instead of China.
However, the freight rates might receive some support in short term as Australian miners banned Manila-based ship crew members arriving in Western Australia, due to COVID-19 outbreak.
This will exclude more candidates for the West Australia trading activities but might encourage more vessels with Manila crew to ballast toward Brazil.
VLSFO prices fall on restart of crude oil production
VLSFO prices fell by $1.50/mt to $343/mt in the port of Singapore, following the downward trend of crude prices movement.
The lower crude prices were due to the restart of crude oil production in Libyan largest oilfield, Sharara, which might add another 200,000 bpd on top of the country’s current production at 300,000 bpd.
Meanwhile, the US workers were returning to oil production platforms at the Gulf of Mexico after Hurricane Delta, while worker strike had ended in Norway after reaching a deal.
Despite of the current low oil prices, Goldman Sachs remained bullish and expected Brent Crude prices to recover to $49 per barrel by the end of 2020, then $58 per barrel for 2021.