Capesize market moved up to higher on higher iron ore prices and robust shipping demand.
Due to the stronger physical market, the Capesize 5 time charter average rose by $245 to $4,196 on Thursday.
The strong freight market had reflected a surge in iron ore prices which had hovered above the $90/mt for almost two weeks, due to the robust steel demand.
Moreover, the Baltic Dry Index had spiked again and may test the 500 readings level, as it reached 494 ratings by Thursday, up 3.56% day-on-day.
Decent volume in the Pacific market
As usual, the Pacific market was the main driving force for the freight rate upticks, especially on the busy west coast Australia to China route.
All three mining majors were active in the market seeking for Capesize ships to move iron ore from Australia to China route.
At least three vessels were snapped up for the route for the early June laycan , done at the range of $4.70-$4.80/wmt.
Firmer Atlantic market
Even things are looking better in the Atlantic market, as some of the lengthy ballaster tonnage list had been digested by the market demand.
Thus, most vessels were heard to head toward the Pacific and reduced some shipping tonnages in the Atlantic market.
It was heard that the Brazilian miner, Vale and trading house, Trafigura were focused in taking vessels for the end-June onward laycans. Thus, the freight indication heard for the Brazil-China route was estimated at the range of $8-$9/wmt.
Higher bunker prices from oil rally
Higher bunker prices continued to support better freight rates as the VLSFO bunker prices went up higher by $9 to $288.50/mt at the port of Singapore.
However, Brent crude prices tended to move lower toward $34 per barrel level, while the WTI also slid toward $31 per barrel, due concerns over second wave of lockdowns.
Despite the price decline, some market sources expected the OPEC + output cuts will eventually support a floor prices in the second half of the year.