Capesize freight rates continued the downward trend with softening physical market that caused a selloff in the paper market.
The Capesize 5 time charter average then dived further by $2,919 day-on-day to $17,790 on Wednesday, despite some late buying activities as some buyers tried to pick from the market bottom.
The Baltic Dry Index (BDI) followed the weak freight market and dropped by 7.17 % day-on-day or 119 points to 1,540 readings.
Rising tonnages amid softening demand
Shipping tonnage had been building up in both basins amid moderate demand, which resulted in corrections in freight rates.
The Pacific market still had some shipping demand, though vessel supply had been slowly increasing, while there were concerns over bad weather in Australia that might cause shipping disruption in near term.
Meanwhile, the ballaster list continued to grow in the Atlantic market, as more owners chose to ballast vessels toward Brazil, while shipping demand was low with only few fixtures heard being done.
Higher bunker prices fail to support declining freight rates
The bunker prices rallied higher as the price of VLSFO rose further by $3/mt to $454.50/mt at the port of Singapore.
Despite the rally, the higher bunker prices failed to support the shipping freight rates, which continued to slide downward on weak fundamentals.
The rising bunker prices responded to firmer crude oil market, which was lifted by a drop of nearly 10 million barrels in US crude inventories last week. The declining inventories implied better oil consumption as global economies recovered gradually from the pandemic.