Capesize rates firmed up with improvements seen in both the Pacific and Atlantic basins on better shipping demand.
Higher bunker prices also lent support to the rising freight rates that pushed the Baltic Dry Index (BDI) higher to 546 points, up 5% day-on-day on Tuesday.
Good fundamentals in Pacific market
The Pacific market continued to drive up the freight rates with healthy cargo volumes and all three miners and operators seeking vessels in the key west Australia to China route.
The good cargo demand was met with tight tonnage supply in the Pacific market that strengthens freight rates further.
Thus, the indicative freight heard on the west coast Australia to Qingdao route was heard to be around the mid-$4/wmt level.
However, there was some market concerns on stricter Chinese port policy on coal imports, which might discourage further seaborne coal cargo movement.
According to trade source, there were some Capesize vessels carrying Australian coals being held up at Chinese ports for around one month without any berthing schedule.
VLSFO rallies further ahead of OPEC + meeting
Bunker prices rallied on higher crude price movement as the VLSFO price spiked by $7 to $300/mt at the port of Singapore.
The uptick was due to market optimism in expecting crude oil prices to hit $40 per barrel as OPEC + considers extending output cut till end of the year.
As such, Brent crude prices hovered around the $39 per barrel, while the WTI maintained around the $36 per barrel level.
However, there was some market concerns on aggravating the supply glut further as the US shale oil drillers were heard to restart productions as crude prices recovered.