Baltic Dry Index (BDI) edged lower on Wednesday on slowing freight rates as market participants prepared for upcoming China’s Golden week in early October.
On Wednesday, the BDI slipped by 2.98% on-day to 2,053 reading, due to the slowing physical shipment movements as most China-based mills had restocked enough iron ore ahead of the holidays.
As such, the Capesize 5 time charter average recorded at $29,046 on Wednesday, down $1,232 on-day and down $765 from Monday’s rate of $29,811.
Golden Week around the corner
The slow shipping freight market was partly due to steel output restriction in China which affected the demand of seaborne iron ore.
Sintering production was halved in Chinese provinces such as Shandong and Hebei till early October in a bid to improve air quality for the National Day holidays.
Thus, the miners were generally quiet this week in fixing cargoes coming out of West Coast of Australia and Brazil.
Waivers on tariffs for soybean
The Panamax paper market saw a flurry of early buying on Tuesday, in anticipation of more soybean imports by China as part of the easing of trade tension with the US.
The Beijing policymaker reportedly granted waivers to several firms, exempting them from retaliatory tariffs on soybeans imported from the US.
However, some market participants were concerned over a cancelled US farm tour for the Chinese delegation. The cancellation pointed to more trade volatility ahead and whether both countries can reach an agreement over their trade dispute.
In view of these mixed market directions, the Panamax time charter average booked a loss on Wednesday at $15,205, down $312 on-day, and down $626 from Monday’s rate.
In the meantime, the smaller vessels came under pressure as well with the Supramax time charter average dropped by $140 on-day to $14,504 on Wednesday.