Capesize earnings have plunged to their lowest level in six months as weakening freight rates combined with rising bunker costs to eat away at earnings.
The Baltic Index weighted average of time charter equivalent rates dropped to just over $14,300 per day on Tuesday, which represented a 13.5% plunge from a week earlier.
The figure, which is the lowest level since June, also represents a 62.3% plunge since capesize rates peaked in September at just over $38,000 per day for a vessel without scrubbers.
The Baltic Capesize Index dipped to 1,950 points on Tuesday, with the broader Baltic Dry Index standing at Monday's figure of 1,103. Both figures were also six-month lows.
The dip in the TCE rates came even as per-tonne freight rates saw a slight uptick after a plunge that lasted most of this month.
The C5 route from West Australia to China, for example, stood at nearly $7.68 per tonne of iron ore, which was an improvement from $7.20 on Friday but a drop from nearly $7.91 a week earlier.
That assessment was somewhat lower than the $7.25 to $7.65 per tonne that Fortescue Metals Group has agreed to pay for a pair of to-be-nominated capesize bulkers to move 160,000 tonnes of iron ore on the route.
"With Christmas approaching there was a jump on the voyage routes with C5 moving up $0.35, which some were suggesting was linked to uncertainty regarding bunker availability and possible weather delays," said the Baltic Exchange's daily market report on Monday.
"There was also an increase in the cost for low sulphur compliant fuel."
On the Brazil-to-China route, the Baltic Exchange assessed the journey at just under $18.98 per tonne on Tuesday. That figure was an improvement from $18.69 per tonne a week earlier.
Meanwhile, bunker prices, which factor into the TCE earnings, have been on the rise amid the slipping rates.
Howe Robinson on Monday assessed very low sulphur fuel oil jumped to $669 per tonne, up from $613 per tonne a week earlier. High-sulphur bunkers at $333 per tonne on Monday, up from $325 a week earlier.
