Capesize freight rates continued its correction phrases on thin market activities, especially among ship-operators.
Thus, the Capesize 5 time charter average went down by $406 day-on-day to $17,638 on Wednesday, following a selloff that reduced spot premium.
The Baltic Dry Index (BDI) then fell by 1.77% or 26 points day-on-day to 1,445 readings from weaker freight rates.
Thin market volume to lower freight rates
Capesize freight rates were lowered by thin market activities even after pricing in of the two typhoon threats namely Maysak and the newly formed Haishen in East Asia.
According to trade sources, the freight rates are expected to drop even lower due to the oversupplied market and moderate prompt Australian demand.
Despite of that, Rio Tinto was heard to fix a vessel for the key west Australia to China route for mid-September laycan at around $8/wmt.
Similarly, the Atlantic market was oversupplied, which pushed freight rates further down despite some fixtures from Brazilian miner, Vale for the end-September laycan.
Bunker prices lift on stock drawdown
VLSFO prices rebounded from losses with gains of $1 day-on-day to $350.50/mt at the port of Singapore, amid some improvement in bunker consumption.
According to Platts and Fujairah Oil Industry Zone, the heavy distillate and residue stockpiles dropped by 14% on-week to 13.32 million barrels at the major global bunkering port of Fujairah.
The oil stocks consisted of both high and low sulfur bunker fuels and the drawdown signified better bunker demand in the region.