Capesize freight rates plunged to a sharp drop after a cooling off from the physical market after a handful of trades.
The Capesize 5 time charter average, then slumped down by $1,515 day-on-day to $33,415 on Friday, after sharp drops seen in both basins.
The Baltic Dry Index (BDI) then dropped by 1.50% on-day, down 49 points to 3,218 readings on weakening freight rates.
Cooling off in the volatile market
The sharp falls of the paper market were attributed to the lower offers and bids in the physical market as fixtures were done at lower rates.
There were also market concerns over weak demand from the West Australia for the early July laycan, as most trade participants stayed in the sideline, expecting further corrections in freight rates.
The Atlantic market remained quiet with market talks on fixtures for the key Brazil to China route, however most were unconfirmed and with little market details out yet.
Falling bunker prices fail to support freight rates
The falling bunker prices also lent little support to the declining freight rates, as the price of VLSFO plunged down by $11/mt to $527/mt in the port of Singapore.
The drop in oil prices corresponded to the strong US dollar which caused a general decline in commodities prices, after US Federal Reserve suggested that it will rise interest rates and end emergency bond-buying sooner than the market expected.
However, crude oil prices still managed to hold up to above $70 per barrel level, amid recovering demand and gradual increase of supply by the oil producers.