Capesize freight rates suffered a dip as the bullish momentum flatten out with fewer fixtures being done at higher rates.
The Capesize 5 time charter average dipped by RMB 67 day-on-day to $14,781 on Tuesday, as the market lost steam with concerns on the muted Atlantic basin.
The Baltic Dry Index (BDI) then moved down by 0.58% or 7 points to 1,200 readings, due to the softening freight rates.
Losing momentum after fixture spree
The freight market was subdued with market concerns about the lengthy ballaster list in the Atlantic basin and fewer fixtures done at the Pacific.
However, it was heard that Brazilian miner, Vale was seeking vessels to move iron ore from Brazil to China for the early December laycan, while some operators were also believed to be sourcing the same route for end-November laycan.
The Pacific market was mostly dominated by iron ore shipments as it suffered from lack of coal shipment after China’s informal ban on Australian coal imports.
Nevertheless, there was decent iron ore cargoes list in the Pacific market, as miners like Rio Tinto and BHP were heard to be seeking vessels to move iron ore for the west Australia to China route for late November laycan.
VLSFO rallies higher but fail to support freight rates
VLSFO prices surged up by $16/mt to $356/mt in the port of Singapore, but the bunker price rally failed to support firmer freight rates.
The bunker rally followed the bullish crude oil movement which reacted positively to Covid vaccine that may potentially end lockdowns and raise overall oil demand.
Besides the vaccine breakthrough, the moderate decline of global oil inventories may support Brent crude oil prices to $50 per barrel over the next few months, according to trading firm, Vitol.
The firm predicted a modest draw of oil inventories, due to the winter heating season. Then, the drawdown is expected to accelerate toward the mid-2021, as countries emerged from lockdown and increased oil consumption.