Capesize freight rates declined on slower market activities especially in the Pacific market, despite a firm Atlantic market.
The Capesize 5 time charter average, then dropped by $760 day-on-day to $46,647 on Friday, amid a volatile paper market.
The Baltic Dry Index (BDI) then fell by $57, down 1.42% day-on-day, to $3,944, as market sentiments turned bearish.
Slow Pacific and tight tonnage in the Altantic
The Atlantic provided much strength for the freight market due to tighter tonnage, as market participants estimated thin ballasters list for the Atlantic market during October.
Moreover, the market expected more shipping demand from the operators after they obtained contract of affreightment (COA) for early October cargoes.
However, the Pacific experienced declining freight rates, as shipping activities slowed with market concerns over low iron ore prices and demand from the ongoing steel output cuts in China.
Thus, only a few fixtures were reported at lower rates for the key western Australia to China route, which dampened market sentiments.
Bunker prices bounce from improved outlook
The bunker prices rebounded on firm crude market, as the price of VLSFO jumped by $10/mt day-on-day to $544.50/mt in the port of Singapore.
The recent rally of crude prices was attributed to the supply destruction caused by Hurricane Ida, though some trade participants expected a quick recovery to offshore operation to mitigate the supply tightness.
However, oil prices remained at elevated levels above $70 per barrel for Brent crude prices, and there were signs of improving oil demand from Covid Delta-hit countries like India, which increased its gasoline consumption.