Capesize freight rates headed southward with losses in both basin as shipping demand cooled off during holiday season.
The Capesize 5 time charter average, then decreased by $1,651 day-on-day to $41,379 on Thursday, as market activities slowed down toward year-end.
The Baltic Dry Index (BDI) also dropped by $80, down 2.34% day-on-day, to $3,343, due to softening freight rates.
Slow demand ahead of holiday season
Freight rates dipped on limited market activities as trade participants anticipated slower shipping demand toward year-end, in view of the holiday season.
Nevertheless, the Pacific basin still attracted fresh tenders from Japanese and South Korean end-users to move iron ore cargoes, though the demand seemed to slow down considerably.
This slowdown was reflected in iron ore shipments exports from Port Hedland, as South Korea’s iron ore imports went down by 27.9% on-year and 4.2% on-month to record 3.7 million mt in November.
Meanwhile, the Atlantic market also moved sluggishly as freight rates were on a backwardation with most participants focusing on January laycans.
Bunker prices drop amid lockdown fears
The bunker prices dipped on revived lockdown fears, as the price of VLSFO dropped by $1.50/mt to $601/mt in the port of Singapore.
The dip followed market sentiment on crude market, as more countries considered to resume lockdown measures to contain omicron variants despite some findings indicated that it was less severe than delta variant.
Some trade participants were expecting further weakness in crude prices from more supplies, but oil demand managed to absorb the excess, despite the release of strategic reserves and more oil producing countries agreed to ramp up production in January.