Capesize freight rates dipped over market concerns of cyclone threat and mixed outlooks for the freight market.
The Capesize 5 time charter average then dipped by $42 day-on-day to $25,515 on Thursday, after a flat trading session with much market focus on the February contract.
The Baltic Dry Index (BDI) also moved higher on improving freight rates and hiked up by 3.51% day-on-day or 62 points to 1,828 readings.
Mixed market with firmer Pacific and softening Atlantic rates
Pacific freight rates had strengthened due to the market uncertainty over the cyclone development off the west coast of Australia.
Cyclone Lucas is expected to make landfall by late Friday or early Saturday, which led to the clearing of vessels in Port Hedland to mitigate the shipping risks.
There was also some healthy shipping demand in the Pacific basin, which resulted in several fixtures for the key west Australia to Qingdao route that were heard done at $7.95-$8.10/wmt range.
Meanwhile, freight rates were dropping in the Atlantic market especially in the key Brazil to China route, as only a few fixtures were heard being secured by major miner.
Apparently, a standoff remained between the shipowners and charterers that resulted them to see the market at different directions.
Bunker prices slip on unexpected inventory build
The bunker prices slid on softening crude oil prices, as the price of VLSFO dipped by $2/mt to $455.50/mt at the port of Singapore.
The decline was due to an unexpected build in US crude stockpiles after three weeks of decline. This dampened market sentiments on oil demand and caused Brent crude price to slide back toward $55 per barrel.
Nevertheless, the Energy Information Administration (EIA) still expects oil demand to rise in Q1 2021 with US crude oil benchmark WTI to average $56 per barrel during the quarter.