Capesize freight rates fell across both the Pacific and Atlantic basin, despite some healthy fixtures done along the week.
The Capesize 5 time charter average, then dropped by $2,495 day-on-day to $33,069 on Wednesday, following the selloff in the trading session.
The Baltic Dry Index (BDI) then dipped by $126 day-on-day, or down 3.87% day-on-day to $3,127, due to softening freight rates.
Freight rates falls from vessels oversupply in the Atlantic
Freight rates was bearish with thin shipping demand and vessels build-up in the Atlantic market, which was estimated around 180 ships, more than 50 vessels on average.
The vessel oversupply caused a freefall of freight rates out of Brazil, despite the thin ballaster list moving from the Pacific market to the region.
In the meantime, there was some freight correction in the Pacific market, though a good of fixtures were being fixed at the start of the week.
According to Platts report, around 13 vessels were being fixed earlier on the week near to the average of 14 vessels being fixed for the Western Australia to China route.
Bunker prices hike on crude rally
The bunker prices soared further with high crude support, as the price of VLSFO rose by $56/mt to $1,010.50/mt in the port of Singapore.
The breaking of the $1,000/mt level found support in the Brent crude prices that rallied toward the $115/bbls price tag, amid high oil demand from US driving season and drawdown in crude stocks.
Meanwhile, market participants also expected a tighter crude supply in near term. For instance, EU’s reliance on Russian crude had also fallen considerably, as northwest Europe reportedly took only 20% of Ural crude cargoes in mid-May, as compared to 70% in late February.