Capesize freight rates dipped on thin market activities with a short trading week, due to public holidays in Japan and Singapore.
The Capesize 5 time charter average, then dropped by $114 day-on-day to $35,895 on Tuesday, despite some improvement in the physical market.
The Baltic Dry Index (BDI) moved flatly and inched up slightly by 0.12% day-on-day, or 4 points to 3,375 readings, due to better freight rates.
Short trading week and returning tonnage supply
The Pacific basin was held up by healthy cargo list with some fresh enquiries of moving iron ore and coal cargoes from Australia and Malaysia.
However, trade participants expected some freight corrections over near term as more tonnage supply re-entered the Pacific market after being withheld by bad weather conditions earlier on.
Meanwhile, there was thin market activities in the Atlantic market, despite bullish market sentiment of more shipping demand coming from Brazil.
Most market participants were heard to be in collecting mood as a standoff occurred between owners and charterers.
Covid fear drives low bunker prices
The bunker prices had taken another beating and failed to support freight rates, as the price of VLSFO dropped by $2.50/mt day-on-day to $522.50/mt in the port of Singapore.
Oil demand recovery was shrouded by market fear of rising Covid Delta cases in Asia, which caused Brent oil prices to drop under the $70 per barrel mark, demoralizing market confidence.
Market participants were concerned if the renewed lockdowns in Australia and China would have a negative impact on iron ore shipping movements and caused volatility in freight rates.