Capesize freight rates dipped further despite a better showing from the physical market that led some trade participants to believe the freight rates were bottoming up.
The Capesize 5 time charter average then fell by $1,273 day-on-day to $31,429 on Tuesday, despite some improvement in the physical market.
The Baltic Dry Index (BDI) also went down by 2.14% or 61 points on-day to 2,795 readings, due to the weakening freight rates.
Decent shipping demand in both basins
There was some healthy demand in the Pacific market that resulted in some fixtures, giving market confidence that the freight rates had bottomed up and rebounded from the lows.
However, the Atlantic market was not out of the woods yet, due to recent sell off and growing ballasters list that weakened shipping demand outlook.
According to trade sources, there was limited fresh cargoes to propel the market and most trade participants expected softening freight rates had yet to find the floor for the trans-Atlantic and fronthaul trips.
Bunker prices gain momentum despite mixed market outlook
The bunker prices maintained upward momentum after recent rally, as the price of VLSFO rose for the second consecutive day by $2.50/mt to $500.50/mt in the port of Singapore.
There were mixed market sentiments on the crude market with some market participants expected better oil demand in the second half of the year, due to easing of coronavirus restrictions in Europe.
Other trade participants were more bearish in waiting for outcome of the US-Iran nuclear deal which may lift trade sanction and allow more Iranian crude in the oversupplied market.