Capesize freight rates continued to correct on softening physical market for a slow start to the week.
The Capesize 5 time charter average then dipped by RMB 216 day-on-day to $12,282 on Monday, amid thin market activities with public holidays in Singapore and India.
The Baltic Dry Index (BDI) also fell slightly by 0.36% or 4 points to 1,111 readings on lower freight rates.
Not much support from RCEP
The Capesize market failed to receive much support from the signing of the long-awaited Regional Comprehensive Economic Partnership agreement (RCEP) over the weekend.
Though the RCEP agreement covered the global total GDP over $26 trillion from sixteen Asia-Pacific countries or around 30% of the global economy.
Besides the RCEP, some trade sources highlighted that the Capesize market was hardly being hindered by the coronavirus pandemic, due to the strong Chinese demand for iron ore.
However, the market was rather quiet recently due to the long ballasting list in the Atlantic market, with a huge fleet of VLOCs and Valemaxes expected to arrive in Brazil by December.
The Pacific market was also rather muted due to lack of Australian coals shipment to China following the informal import ban, while few fixtures were being done recently to move iron ore out of west Australia.
Bunker prices surge higher on news of Covid vaccines
Bunker prices continued to surge following the crude oil price uptick, as it rose by $6.50/mt to $359/mt in the port of Singapore.
Due to the news of Covid vaccines, the Brent Crude prices went up higher toward $44 per barrel in 2020, while the WTI Crude prices headed toward $41 per barrel.
Meanwhile, there was also increase of oil consumption for China with high crude refining average at 14.14 million barrels per day in October to match up with previous record-high level seen in June this year.
Similar high oil consumption was recorded in India as well, as the country’s fuel demand reached 17.8 million in October, up almost 15% month-on-month and back to pre-Covid levels for the first annual increase since February this year.