Capesize freight rates continued to come under selling pressure, despite some improvement seen in the physical market.
The Capesize 5 time charter average, then fell further by $1,144 day-on-day to $29,128 on Wednesday, after an erratic paper trading session.
The Baltic Dry Index (BDI) also dropped by 2.76% day-on-day, down 89 points to 3,139 readings, due to the softening freight rates.
Improving demand fails to keep freight rates afloat
There was some improvement in the physical market with handful of tenders done at slight premiums.
However, these were not enough to reverse the extended losses of freight rates in an oversupplied market.
Hence, some trade participants felt that freight rates were yet to find at floor yet for the key west Australia to China routes, despite much shipping demand from the South Korean and Japanese end-users.
The Atlantic market remained quiet, though there were much market talks of potential fixtures done by Brazilian miners. However, the freight rates were depressed, affecting by long ballaster list and thin market activity.
Bunker prices spike on better regional demand
The bunker prices climbed on better regional bunker sales, as the price of VLSFO rose by $5/mt on-day to $558/mt in the port of Singapore.
The price upticks were linked to higher Singapore’s bunker sales in June 2021, up 1% monthly, though Panama’s bunker demand suffered a drop of 11% on-month to total sales of 358,827 mt in June.
The difference in regional bunker sales reflected various economies recovering from the Covid pandemic, where the general market consensus expected a gradual global bunker recovery by end of 2021, following by higher vaccination rates among countries.