Capesize freight rates headed south due to weakening physical market in both basins.
The Capesize 5 time charter average then went down by $312 day-on-day to $10,295 on Wednesday.
The Baltic Dry Index (BDI) however, went up slightly by 0.09% or 1 points to 1,122 readings, due to robustness in the Panamaxes’ physical and futures markets.
Slow shipping demand ahead
Capesize shipping demand crawled to a slow, due to softening demand out of Brazil in the oversupplied market.
The Pacific market did not offer much support with a lack of fixtures in the west Australia to China route, due to market concerns over cyclone.
Thus, both the Port Hedland and Dampier terminal had issued cyclone alert stage 2, which discouraged trade participants from booking more fixtures.
Meanwhile, the Atlantic market was muted as well, with thin cargo list for December out of Brazil. More market participants were heard to be looking at the January laycan instead, amid the lengthy ballaster list.
No support from rising bunker prices
The rebound of bunker prices offered little support to the freight rates, even though the VLSFO rose higher by $4/mt to $388.50/mt at the port of Singapore.
Market sentiment of oil demand remained bearish, as the Energy Information Administration (EIA) reported a huge inventory build of 15.2 million barrels for the week ended at Dec 4.
However, there was some light at the end of the tunnel, as oil demand was coming back to Brazil with fuel consumption surpassing pre-Covid level and slated to remained high for next year.