Capesize market continued the good run, thanks to the robust Pacific market with better freight rates.
Reflecting the better physical market, the Capesize 5 time charter average increased by $489 to $3,951 on Wednesday.
With Capesize market as the driving force, the Baltic Dry Index spiked again and gained over 5.30% on-day to 477 readings by mid-week.
Pacific market as main driving force
More trade participants expect higher demand for iron ores shipping as China might introduce more infrastructure stimulus package to boost its crippled economic.
As such, the key route like west coast Australia to China had attracted much miners and operators seeking vessels, mostly for late May and early June laycan.
Besides, there were some concerns over bad weather in Northern China which might cause some delays to shipments and support freight rates in upward movement.
Thus, the indicative freight heard on the west coast Australia to Qingdao route was in the $4.60/wmt to $4.75/wmt range.
Decent fixtures in Atlantic market
A standoff remained in the Atlantic market between owners and charterers, but nevertheless there were a good number of fixtures on key routes.
Mining major, Vale was heard to fix vessel for early June laycan at around $7.25/wmt for the key Brazil to China route. Overall, the indicative freight levels heard on the Brazil to China route were in the high-$7s/wmt to $8.25/wmt range
In the meantime, the lengthy ballaster list may get some reduction as ship owners were heard to cease ballasting toward Brazil as time charter hire returns on the Brazil to China route is still below owners’ operating expenses.
Higher bunker prices from oil rally
The high bunker prices had lent support to the freight rates as the VLSFO bunker prices hiked up by $1.50 to $279.50/mt at the port of Singapore.
Brent crude prices moved upward toward $36 per barrel level, while the WTI went up to $34 per barrel, after Russia indicated to reduce its output to comply with OPEC + guideline.
Further oil price gains were attributed to lower US crude inventories which fell by 5 million barrels last week and easing of some states to resume work activities.