Capesize freight rates continued its upward movement due to better physical market with healthy demand in the Pacific market.
The Capesize 5 time charter average then rose $489 day-on-day to $15,737 on Monday, due to the pickup in the physical market.
The Baltic Dry Index (BDI) also gained from the active physical market and hiked up by 1.18% or 15 points day-on-day to 1,282 readings.
Better demand for upcoming China’ holidays at October
The shift in market sentiment was attributed to the higher demand for shipping iron ore and coals as Chinese steelmakers are expected to restock raw materials ahead of week-long holiday over Oct 1-8 period.
Thus, the three major miners, Rio Tinto, BHP and FMG were active in the Pacific market, seeking for vessels for end-September laycans to move iron ore cargoes.
It was heard that Rio Tinto managed to fix ship for the west Australia to China route for end-September laycan at around $7.40/wmt, up 40 cents from previous fixture last week.
On the contrary, there was limited trading activity in Atlantic, due to a standoff between shipowners and charterers especially for October laycan cargoes.
VLSFO prices hike up over crude supply concerns
VLSFO prices rebounded by $2.50/mt day-on-day to $313.50/mt in the port of Singapore, due to better crude price movements.
Crude oil prices rose due to supply concern over Hurricane Sally as it heads toward the Gulf of Mexico on Tuesday.
Trade participants were worried that category 2 hurricane might cause disruption to oil production, as most oil producers had evacuated their offshore platforms away from the affected areas.
In the meantime, the oil market sentiments were lifted by better pricing predictions by investment banks such as Citigroup and Goldman Sachs.
Both banks predicted oil prices to rise over $60 per barrel in 2021, as the supply glut will be drawn down then by the recovery of global oil demand back to pre-Covid-19 level.