Capesize freight rates continued to slide downward on market inactivity with the absence of Chinese trade participants on holidays celebration.
The Capesize 5 time charter average then dropped by $605 day-on-day to $12,057 on Monday, on thin market activities at the start of the week.
The Baltic Dry Index (BDI) followed the downtrend and dipped by 1.20% or 16 points to 1,317 readings, as shipping activities slowed ahead of the Lunar New Year holidays.
Falling Atlantic rates amid bearish sentiment
The market inactivity affected both basins, but especially hard-hit for the Atlantic basin with low shipping demand amid lengthy ballaster list.
Trade sources stated that there were almost no cargoes left for February laycan out of Brazil, and any fresh enquiries will be expected for early March laycan, when a growing ballaster list were due to arrive.
On the contrary, there was a still decent cargo list for the Pacific market, but market participants were concerned about the lack of coking coal shipments heading for China.
However, there was plenty of iron ore shipment being fixed by major miner like Rio Tinto and ship operators for late-Feb laycan, though shipping activities are expected to get thinner due to the upcoming Lunar New Year holidays.
High bunker prices offer little support to freight rates
The high bunker prices did not provide much support to the falling freight rates amid bearish market sentiment, as the price of VLSFO rose further by $8.50/mt to $494/mt in the port of Singapore.
The bunker price uptick had followed market optimism over oil demand with gradual recovery of global economy, while the historical US pandemic aid package worth $1.9 trillion is slated to pass by February.
Brent crude oil prices also broke the $60 per barrels level, citing the supply glut may be easing with higher consumption rates as global economies recovered from the pandemic.