Capesize freight market was largely stagnant amid high market volatility and thin trading activity.
The forward freight agreement (FFA) has eked out some small gains within the limited activity as most trade participants are still waiting for clearer market directions.
Due to the uncertainty of the coronavirus pandemic posed to the global trade, the Baltic Dry Index slid by 1.77% on-day to 612 points at Wednesday.
Pacific market enjoys modest shipping demand
Most shipowners prefer to keep vessels in the Pacific region rather than ballasting them to the west.
Ships were also mostly cruising in slow steaming in voyages to save costs and adjusted their shipment dates accordingly.
Three mining majors were heard to be seeking Capesize vessels for moving cargoes out of west Australia. As such, the time charter level had climbed up slightly despite the voyage numbers on west Australia to China route remained relatively the same.
Atlantic market constrains by monsoon season
Freight rates came under pressure due to the over-tonnage in the shipping route of Brazil to China.
Brazil’s iron ore supply had tightened due to monsoon rainy season that hindered mining operations and shipping activity.
However, some trade participants expect shipping volumes to improve from sometime in April, barring any potential disruptions from the worsening coronavirus outbreak in Brazil.
In view of these bearish market factors, the Brazil to China route were in the low-$10s/wmt to $11/wmt range.
Oil glut depresses bunker prices
VLSFO prices continued to slide by $0.50 on-day to $303.50 per tonnes at the port of Singapore, due to falling crude oil prices.
Brent crude price slumped toward $30 per barrel, while the WTI crude went under toward $26 per barrel level from oil price war.
IHS Markit expects the global oil glut to reach between 800 million barrels and 1.3 billion barrels in H1 2020 alone, much bigger than the glut of 360 million barrels in late 2015-2016 period.