Capesize freight rates continued to dip after a market pullback from limited activities in the physical market.
The Capesize 5 time charter average, then nosedived down by $1,494 day-on-day to $29,106 on Friday, after a choppy market.
The Baltic Dry Index (BDI) also fell by 1.59% day-on-day, down 53 points to 3,285 readings, following the softening freight rates.
Downturn physical market after paper selloff
Market sentiment remained bearish after a paper market selloff and thin shipping activities in the physical market.
There was much market chatter in the Pacific basin, but resulted in little fixtures, though the market was supported by healthy cargo list.
Similarly, the Atlantic market fared poorly due to limited shipping activities and lengthy ballaster list. However, some market participants expected better shipping demand in Q3, in view of more outputs from iron ore miners.
Bunker prices stabilize amid mixed outlook
The bunker prices stabilized on mixed market outlook, as the price of VLSFO were flat at $553.50/mt in the port of Singapore.
The price stagnation was traced to indecision of OPEC on output hike. Apparently, some factions appeared in the cartel with one group urging to ease cuts by 2 million bpd by the end of 2021, while another group opposed to the output quota.
Hence, market participants were worried that there might be a breakup in the cartel and resulted in a price war among members.