Capesize freight rates continued to head south on weakening freight rates, as shipping demand dipped in both basins, amid the oversupplied market.
The Capesize 5 time charter average went down by $1,159 day-on-day to $10,607 on Tuesday, due to the deteriorating C5 market.
The Baltic Dry Index (BDI) also dropped by 3.53% or 35 points to 1,121 readings, following the softening of Capesize freight rates.
Falling freight rates till year-end
The shipping demand seemed to slow down with falling freight rates expected to continue till year-end holidays.
Even the Pacific market was not spared from the sharp correction in freight rates, despite having decent cargo list volumes on the key west Australia to China route.
Thus, the indicative freight was heard to retreat from the $7/wmt level to the range of $6.50-$6.70/wmt on the west coast Australia to Qingdao route.
Meanwhile, the Atlantic market did not see any improvement and still suffered from the high ballaster list, despite having a number of ballasters diverted to other markets.
Less support from bunker prices
The bunker prices were flat and offered little support to the falling freight rates, as the VLSFO were static at $384.50/mt at the port of Singapore.
Bearish oil sentiment became vogue as the Energy Information Administration (EIA) cut oil demand growth forecast by another 110,000 bpd to 5.78 million bpd for 2021, in view of back-and-forth lockdowns among affected countries.
Similarly, the administration also rollbacked its oil demand growth estimate for 2020, by reducing 240,000 bpd to 8.85 million bpd.