Capesize rates slipped on the short week, with public holidays in Singapore and Greece that affected shipping activities.
The Capesize 5 time charter average thus dipped by $215 day-on-day to $19,697 on Monday, in view of lacklustre physical market.
Despite the weakness of Capesize, the Baltic Dry Index (BDI) gained slightly by 0.33% day-on-day to 1,506 readings.
Slow market for the week
Due to public holiday in Singapore on the Aug 10 and later a Greek holiday at Aug 15, many trade participants expected a muted trading week ahead.
Besides, there was adequate tonnage supply in both Pacific and Atlantic basins that lowered the support for freight rates.
For instance, there was lengthy ballaster tonnage due for arrival in Brazil during August that extended losses for freight rates.
On the other hand, there was some healthy shipping in the Pacific market, but more vessels were being made available for the regions after Typhoon Hagupit that weakened freight supports.
Bunker prices drop over mixed market outlook
VLSFO prices slipped by $1.50/mt day-on-day to $347.50/mt at the port of Singapore, over mixed market outlook.
Some market participants were concerned with Saudi Aramco’s plan to increase its oil production capacity from 12 million barrels per day (bpd) to 13 million bpd, which might add to the inventory glut.
However, the higher capacity did not translate to the production as the OPEC + production cut was still in effect till the end of 2020.
On the other hand, Saudi Aramco stated that the global oil demand has been recovering gradually amid Covid-19, with oil demand of 90 million bpd recorded in June, up from 75-80 million bpd registered in April.