Capesize paper market went downhill on lower trading activities over bearish market outlook and falling crude prices.
Trade participants were concerned over the sharp plunge in crude prices and its impact on bunkers and freight rates.
As such, Capesize 5 time charter average went down by $525 to $9,556 on Tuesday, after a sharp sell off down the curve.
Both the Pacific and Atlantic basins posted lower fixtures amid the negative news circulating in the market, following the collapse of the WTI crude market.
Cooling off in Pacific and Atlantic markets
Shipping demand seemed to have cool-down in the Pacific market with sluggish demand to move both iron ore and coal cargoes.
It was heard that only Rio Tinto remained in the market seeking to move iron ore in the key west Australia to China route.
As such, Rio Tinto was heard to conclude a Dampier to Qingdao fixture basis May 6-8 laycan at $4.55/wmt.
The Atlantic market shared similar fate as the Pacific market, with falling freight rates especially in the key Brazil to China route.
However, it was heard that Vale had fixed around three ships for the Tubarao to Qingdao route at low-$11s/wmt for June 1-10 laycan.
Lower bunkers and crude prices to last till mid-May
VLSFO bunker prices plunged by $33 to $228.50/mt in the port of Singapore, following the sharp drop in crude prices.
WTI crude had ventured to the negative territory early in the week, however it had rebounded to the $11 per barrel level, while Brent crude prices were hovering around the $19-20 per barrel mark.
Crude price volatility is expected to last at least middle of May, according to Goldman Sachs. This was due to supply glut and much availability of oil in the market. As such, it was estimated a record-high volume of 160 million tonnes of crude oil being stored at floating storage.
In the meantime, the US Strategic Petroleum Reserve was almost stocked to the brim at 635 million barrels out of the capacity of 713 million barrels of crude oil.