Capesize market seemed to turn around on better freight rates in key routes as cargoes volume returned.
Thus, the Capesize 5 time charter average recorded at $2,394 on Friday, up by $402 day-on-day.
Despite the rebound, Capesize rates were still almost in historical all time low, thus it may be too early to conclude that the recovery will bring about a sustained rally.
Given the uptick, the Baltic Dry Index (BDI) bounced from the lows and hovered at 407 ratings by the end of last week, after several spending days at under 400 levels.
Robust shipping demands out of Australia
So far, the west Australia to China route remained the main driver force for rebound in Capeszie rates.
Cargoes volume were deemed as healthy, with major miners like Rio Tinto, BHP and FMG all seeking ships for the key west Australia to China routes for end-May and early June laycans.
Higher bunker prices and tighter tonnage for end-May dates had also supported better freight rates, as most of the fixtures were done within the range of $3.80-$3.95/wmt for late May and early June laycan.
Atlantic market is the weakest link?
Despite the gains in the Pacific, the Atlantic portrayed a bearish scenario with standoff between owners and charterers on key Brazil to China route for the end-May and June laycans.
High ballasting lists to Brazil and increase of ships drifting near Singapore and South Africa also attributed to the declining freight rates from the oversupply of vessels.
Oil rally lifts bunker prices
VLSFO bunker prices rose by $8 to $250/mt at the port of Singapore, following the oil rally in the crude oil price movement.
Brent crude prices went up higher to $34 per barrel level, while the WTI gained toward $31 per barrel, due to record low rigs count in the US since the mid-2009 to a total of 258 by 15 May 2020.
Due to the market optimism, Barclay raised its forecasts for Brent crude oil price to average $37 per barrel, while WTI to $33 per barrel for 2020, then $53 and $50 for 2021.