Capesize freight rates continued to drop fast due to poor shipping fundamentals despite healthy demand in the Pacific market.
The Capesize 5 time charter average then dropped by $1,686 day-on-day to $27,934 on Thursday, despite some market talks of blockade lifting in Bolivar that resulted in some late upticks in trading.
The Baltic Dry Index (BDI) also slipped down by 2.40% or 66 points on-day to 2,688 readings, amid weakening freight rates.
Freight corrections in both basins
Market sentiments remained bearish for both basins with freight rates extending losses, especially in the Atlantic market due to lengthy ballast list.
Poor shipping demand persisted in the Atlantic basin, with little iron ore shipments in the key Brazil to China route, though some market participants expected demand to recover in June-July period, as the Brazilian miners tried to increase exports.
The Pacific market fared better but was not spared from falling freight rates, despite boosting healthy cargo demand, plus growing enquiries from Japanese and South Korean steel mills to move more iron ore cargoes.
Bunker prices continue to rise from firm crude
The bunker prices increased on firm crude prices, as the price of VLSFO increased by $2/mt to $492/mt in the port of Singapore.
The overall oil market was still optimistic on oil demand recovery with good economic US data on better job market, and lower crude inventories.
It was also estimated more US citizens may travel over the upcoming Memorial Day holidays after the easing of Covid restrictions.
Moreover, the OPEC also stated that its members will maintain the pace of ramping up production gradually to better global demand.