Capesize rates continued its downward slide as supply buildups, while shipping demand remained yet to be seen in the market.
Following the decline, the Capesize 5 time charter average dived down by $1,402 day-on-day to $25,562 on Tuesday.
Likewise, the Baltic Dry Index (BDI) continued to descend and dropped by 2.79% day-on-day at 1,742 readings.
A week of correction?
With much shipping supply on the Pacific and a muted Atlantic market, some trade participants turned bearish for August laycan and were more optimistic for Sep-Oct period.
Other participants pointed to year-high iron ore prices over $110/mt that might support Capesize rates further. However, they were cautious too as steel demand typically fell in the summer season due to bad weathers affecting construction activities in China.
There was also a lack of coal shipments from Australia to China, which led some participants to doubt if the high Capesize rates are sustainable.
Bunker prices fall on delivered lower margins
VLSFO prices reversed into decline and dropped by $3/mt to $334/mt at the port of Singapore, due to high inventory and delivered lower margins.
Bunker demands had declined for two months in the row for the city-state since May, while the residue stocks rose to three-year high last week.
Due to these, the delivered bunker margins had reduced by more than half in the port of Singapore, toward $10/mt in early July as compared to the peak of $35/mt in end-April 2020.