Capesize freight rates moved downward on slow trading after last week rally, amid market optimism on better post-holidays demand.
The Capesize 5 time charter average then dropped by $351 day-on-day to $13,873 on Monday, after a sluggish start to the week.
The Baltic Dry Index (BDI) went up slightly with a gain of 0.65% or 11 points to 1,709 readings, slowing down from the freight rates rally last week.
Waiting for clearer market direction
The weaker freight rates reflected trade participants in waiting for clearer market directions after the typical post-holidays rally.
Shipping activities started sluggishly at the beginning of the week, with little offers and bids in the market, while market participants were worried about growing list of ballasters passing through Singapore, which might result in vessel oversupply in the Atlantic market.
So far, the Atlantic market saw thin activities, as most of the February fixtures were done, while the March laycan out of Brazil was fairly supported by long tonnage list.
Meanwhile, the Pacific cargo demand remained healthy with good volume of iron and coal shipments, but minimal activities were heard over the key western Australia to China route.
Bunker prices slip from recent rally
Bunker prices fell slightly from previous rally, as the price of VLSFO dropped by $0.50/mt to $502.50/mt in the port of Singapore.
Crude oil prices had rebound strongly, in view of the supply shortfall caused by the winter storm in Texas and plunging global Covid-19 rates that reflected better oil demand recovery.
Due to these factors, some market participants expected a strong oil market going into summer season, as OPEC + is likely to increase output at modest level, while Russia is aiming to return to normal oil production.