Freight rates however found supports in the high bunker prices as Brent crude oil price spiked to a four-year high touching the $85 per barrel mark this week. This prompted the Singapore bunker prices IFO 380 to break the $500 per mt level on Monday, 1 October 2018 and jumped to around $517 per mt mark on Wednesday, 3 October 2018.
Golden week break for the Chinese trade participants
In the meantime, the freight market faced an absence of Chinese traders due to the week-long National holiday in China. With shipping inactivity in China, the physical continued its lag against the Capesize paper market.
“Atlantic Capesize market is sluggish in comparison with the firmer Pacific market. So, it will discourage owners to ballast to Brazil which could, in time, lend some additional support to the Atlantic.” said a FIS FFA broker.
By Wednesday, the optimism in paper market started to fade just like the lagging physical market. Thus, the Oct contract was first traded at $22,100 before quickly sold off at a low of $21,300. Then, the Q4 touched $23,500 as it transpired some of the headline physical rates appeared to be favourably calculated on voyage basis.
Despite the selloff, the Capesize 5 Time Charter average booked a gain of $102 day-on-day to $19,319 on Wednesday, up $570 from Monday’s rate of $18,749.
Panamax slows down amid China’s National holidays
The Panamax market had a lacklustre opening for the week with a limping physical market as well as shipping inactivity arise from China’s week-long National holiday. “A stand-off in Pacific and a flattening Atlantic market meant that Panamax paper took its cue from the capes trailing the bullish sentiment,” observed a FIS Panamax shipbroker.
However, he later noted that the resistance against the bullish sentiment began to form in the Panamax paper market, where the early gains were rollbacked and with offers thinning out.
Later in the week, Panamax however saw a much optimism from fresh enquiries that help to propel the Panamax time charter average to $13,470 on Wednesday, up $9 day-on-day but still book a loss of $107 from Monday’s rate at $13,577.
Quiet week for Supramax and Handysize
Supramax had a quiet week as expected on the Golden week which started on Monday. Amid the shipping inactivity, there was some little early interest came out of Asia that led to limited interests throughout the European open at the start of the week.
Later, the Supramax paper saw some early morning positivity again on Wednesday with time charter average recorded a rise of $9 day-on-day to $12,951, but down $30 from Monday’s rate at $12,981. Meanwhile, the Handysize market had a quiet trading day on Wednesday with the time charter average posted at $9,209, up $22 day-on-day.