Capesize freight rates reversed into losses in the volatile market, as the physical market lost steam toward the month-end.
The Capesize 5 time charter average, then dropped by $1,695 day-on-day to $32,604 on Wednesday, after a choppy market to a start of the new month.
The Baltic Dry Index (BDI) also dipped down by 1.02% day-on-day, down 35 points to 3,383 readings, due to softer freight rates.
Sharp correction from high tonnages
Trade participants attributed the declining FFA market to the returning tonnages of North China by early July.
Moreover, the Atlantic market was dragged down by lengthy ballasted list that limited fresh shipping demand to offset the oversupplied market.
This left the Pacific market to hold up the short-term shipping demand with healthy cargo list, though freight rates continued to soften from thin market activities.
Bunker prices move up amid mixed outlook
The bunker prices managed to rebound from previous losses, as the price of VLSFO inched up by $1/mt on-day to $542.50/mt in the port of Singapore.
The oil market outlook was mixed with low US crude inventory, while trade participants waited eagerly if OPEC will increase supplies for their upcoming meeting in July.
As OPEC is expected to increase production of 500,000 barrel per days by August, while some trade participants were more bearish in oil demand due to the resurgence of Covid Delta variant cases.