Capesize freight rates fell sharply after the recent rally, as the market consolidated, while profit takings continued in the paper market.
The Capesize 5 time charter average, then plunged down by $2,010 day-on-day to $49,089 on Tuesday, after much selling pressures.
The Baltic Dry Index (BDI) followed the decline and slid down by $103, down 2.43% day-on-day, due to weakening freight rates.
Little market activities in both basins
The decline of FFA mirrored the muted shipping activities on both basins, as little fixtures had been reported and freight rates had been moving at downward trend despite tight tonnage.
Some trade participants viewed the slip-up to be temporary, as tonnage supply remained tight in the Pacific market, with the constant port congestions among Chinese ports.
In the meantime, iron ore miners are expected to move iron ore shipment more consistently in near term to meet their output guidance toward year-end.
However, most of the trade participants were heard in collecting moods and monitoring market directions, after a series of bearish market news on slower economic activities recorded in China in the manufacturing and service sectors during the month of August.
Bunker prices remain firm despite declining freight
The bunker prices continued its upward hike, as the price of VLSFO rose by $1/mt day-on-day to $539.50/mt in the port of Singapore.
The higher bunker prices followed the firmer crude prices, due to supply concerns over Hurricane Ida and its effects on the production losses of oil platforms at the Gulf of Mexico.
Some trade participants expected a quick recovery, as some of the output losses may be offset by OPEC decision to boost output by 400,000 barrels per day since August, while Russia is likely to raise oil production as well.