Capesize freight rates softened on thin trading activities, as the shipping market slowed down on holidays season.
There were also some market concerns on whether the bad weather off coastal China will result in port closures as it did in the past.
As the Chinese meteorological authority issued orange alert on Monday, or the second most severe weather condition for the upcoming cold wave, which may bring gales to some sea areas near eastern and southern China regions.
Slow activities in key iron ore shipping routes
Both the key routes in Pacific and Atlantic basins were muted with only few fixtures as most trade participants were off for holidays season.
According to trade sources, there was some offers on shipping iron ore out of west Australia for the mid-January laycan, while major miners like Rio Tinto and BHP were heard to secure vessels around mid- January loading.
However, the market was quieter for the Atlantic basin due to regional holidays, with almost no shipment fixed from Brazil for mid-January and end-January loading, according to trade sources.
Bunker prices rise amid bearish sentiment
The rising bunker prices did little to support freight rates, as the VLSFO rose by $5.50/mt to $409.50/mt at the port of Singapore.
The bunker price upticks were against the backdrop of bearish market sentiment on more pandemic lockdowns that lowered oil demand.
Thus, market consultancy firm, IHS Markit predicted that the oil demand to return to pre-pandemic level in late 2021 or early 2022, suggesting the long road to recovery, especially for the continued low demand for jet fuel.