Capesize freight rates continued to drop sharply, as shipping activities slowed down in Europe due to public holidays.
The Capesize 5 time charter average, then fell by $4,229 day-on-day to $28,840 on Thursday, following the aggressive sell off in the session.
The Baltic Dry Index (BDI) then dipped by $194 day-on-day, or down 6.20 % day-on-day to $2,933, due to softening freight rates.
Freight rates face corrections after oversold
Freight rates went further into corrections, despite healthy fixture volumes done in the Pacific market.
Some trade participants believed the freight decline as part of the summertime correction in the Pacific market and expected rates to bounce within the next 2 weeks.
As freight rates went up quickly over recent weeks and it was just natural for it to scale down after a rally, thus some trade participants expected rates to reach a floor soon.
However, the Atlantic basin continued to weaken despite some fixtures and thin ballasters list in Brazil, as most owners kept vessels in the Pacific.
Bunker prices correct after recent rally
The bunker prices fell from the $1,000/mt level, as the price of VLSFO fell by $18.50/mt to $992/mt in the port of Singapore.
The bunker correction contrasted with the strong crude market, as Brent crude prices went beyond the $115/bbls level, due to supply tightness in the market.
However, there was market concern over prolonged China’s zero-tolerance Covid lockdown that slowed economic growth in their major cities and reduced oil demand.