Capesize freight rates reversed into downtrend, due to thin market activities following the short working week paused by holidays in Asia and Europe.
The Capesize 5 time charter average then dropped by $1,434 day-on-day to $29,620 on Wednesday, after a selloff in the market.
The Baltic Dry Index (BDI) also dipped down by 1.96% or 55 points on-day to 2,754 readings, due to softening freight rates.
Muted market activities amid holidays period
Despite healthy demand in the Pacific market, the overall freight market remained bearish especially for the key Brazil to China route, which is expected to soften for a while for the first half of June.
On the contrary, the Pacific market was supported by firm iron ore and coal demand out of Australia, while tenders coming from Japan and South Korea on steelmaking raw materials also strengthened demand.
However, the freight rates still went southward, following the softening Atlantic market which showed lack of iron ore shipping demand out of Brazil amid ample tonnage supply.
Bunker prices gain on firm crude demand
The bunker prices gained on better crude market, as the price of VLSFO inched up by $3.50/mt to $490/mt in the port of Singapore.
The bullish market sentiment was supported by falling US crude stock after American Petroleum Institute recorded a crude draw of 439,000 barrels for the week ended on May 21.
Similarly, the Energy Information Administration also reported a weekly draw of 1.7 million barrels in crude oil inventories at 484.3 million barrels which came under the five-year seasonal average.
Moreover, market participants expected better oil consumption for summer season to support further oil price upticks.