Capesize freight rates fell further on steep selloff market actions, amid thin tonnage volumes and good market fundamentals.
The Capesize 5 time charter average, then slipped down by $3,187 day-on-day to $79,535 on Tuesday, as paper market extended losses.
The Baltic Dry Index (BDI) also dropped by $110, down 2% day-on-day, to $5,378, due to weakening freight rates.
Worsening port congestion in China due to extreme weather
Freight rates were sluggish as market were concerned over the Typhoon Kompasu and its impact on southern China’s shipping and ports operations.
The shipping delays from the extreme weather worsened tighter tonnage availability as more ports were expected to close, while vessels diverted to other ports.
The Pacific market then continued to attract some shipping demand from the Japanese and South Korean end-users, while ballast list remained thin for the Atlantic market as owners preferred to keep vessels within the Pacific.
Bunker prices extend rally on strong crude market
The bunker prices extended its bullish run on firm crude market, as the price of VLSFO hiked up by $1.50/mt to $608/mt in the port of Singapore.
Some banks like Citigroup expected Brent crude prices to reach $90 per barrel by this winter season, due to the global energy crunch that forced more power plants to use oil instead of the natural gas for power generation.
This switch may result additional oil consumption of 1 million barrels per day (bpd), while OPEC producers might increase output to ease energy prices in near term.