According to an article published in FIS, capesize paper market continued its positive run on Thursday, amid limited physical market activity.
Key drivers
- The main driver for recent rising Capesize, the Pacific market had failed to see further upticks after Wednesday, as freight rates went up for the previous two-days growth.
- Mining major, Rio Tinto was heard to be still seeking vessels to move cargoes across the Pacific, but apart for that, there was limited activity in the region.
- Thus, the Capesize 5 time charter average booked a gain of $22 day-on-day to $2,735 on Thursday.
Slow market due to Brazil’s Carnival celebrations
- Shipping activities were muted in Brazil as the country rested for Carnival celebrations, with limited movements in key routes after Vale’s last fixture.
- Market participants expect a long ballaster list for end-February and first half March laycan, which may be hard for market to digest amid the lengthy tonnage list in the Atlantic.
- The Atlantic freight rates were estimated to depress in near term as earlier ships will need to compete for later cargoes from the long vessels waiting list.
Bunker demand softens in the Far East
- VLSFO prices dropped by $3.50 day-on-day to $510.50 per tonne at the port of Singapore, due to lower bunker demand in the Far East amid the coronavirus outbreak.
- Brent crude oil price, however, remained firm at around $59.31 per barrel on Thursday, supported by tight supply due to US sanctions of Rosneft and export problems in Libya and Venezuela.
- Chinese oil refiners had reduced their flow rate to a six-year low at 10 million bpd in mid- February, down from 11.4 million bpd earlier this month. The low run rate was attributed to failing oil demand following the coronavirus outbreak that slowed industrial activities in China.
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Source: FIS
