Capesize freight rates faced slight correction after recent paper rally, as the physical market failed to keep up with the market optimism.
The Capesize 5 time charter average then dipped by $339 day-on-day to $42,031 on Tuesday, following a selloff in the trading session.
The Baltic Dry Index (BDI) also inched up slightly by 0.43% or 14 points on-day to 3,254 readings, due to the lackluster physical market.
Freight corrections after recent rally
Despite the paper market corrections, the market sentiment remained buoy over robust iron ore and strong steel demand in China.
However, the market optimism was not supported by much physical fixtures after a flurry of trades seen earlier in the week, which led to speculation on further consolidation of the market.
Meanwhile, the Pacific market recorded more fresh enquiries, though there were some concerns over crew changes and restrictions in port of calls on some Chinese ports to contain the spread of coronavirus infections from India.
On the contrary, there was limited fresh enquiry out of Brazil, while a standoff remained between owners and operators over freight rates.
Bunker prices slide on weakening crude
The bunker prices slumped on weaker crude prices, as the price of VLSFO dropped by $9.50/mt on-day to $500.50/mt in the port of Singapore.
Market participants were concerned over lower oil demand in India as oil refining rates fell to an average of 85-88% for the country’s largest refiner, Indian Oil Corp, amid rising Covid rates.
The bearish sentiment found little support from latest OPEC’s prediction of better crude demand growth of the US and China by additional 200,000 bpd, due to market concerns over the cartel’s higher than expected production figure in April.