Capesize freight rates continued to move downward, as shipping activities thinned after recent rally.
The Capesize 5 time charter average then dropped by $657 day-on-day to $13,216 on Tuesday, as the March contract came under pressure and traded lower.
The Baltic Dry Index (BDI) however, rose higher on the strength of Panamax market, spotting a gain of 1.05% or 18 points to 1,727 readings.
Thin activity and oversupply concerns
The post-holiday hype seemed to calm down this week with slack trades amid lengthy ballaster list and lower fixtures.
Market was also concerned over the recent steel production cut in Tangshan, which might affect the appetite for seaborne iron ore in the near term.
Thus, fixture volumes had dropped in the Pacific market despite healthy cargo demand, while indicative rate was also heard to be done lower at the range of $6.70-$6.85/wmt for the west coast Australia-to-Qingdao route.
Meanwhile, the market outlook remained bearish for Atlantic market due to the long ballaster list, which were heard to be slow steaming toward Brazil and expected to arrive in mid-Mar or later.
Bunker prices draw support from strong crude
Bunker prices remained robust but failed to support the falling freight rates, as the price of VLSFO surged by $19/mt to $521.50/mt in the port of Singapore.
The high bunker prices drew support from crude oil price rally, which hovered about the $65 per barrel mark, despite the resumption of crude output in winter storm-affected Texas.
In the meantime, the trade participants remained optimistic for oil demand with falling new Covid cases that resulted UK to lift its lockdown restriction by March.