Capesize freight rates surged up on flurry of fixtures being done in physical market, especially in the Brazilian market.
The Capesize 5 time charter average then rose by $1,818 day-on-day to $25,631 on Wednesday, due to bullish market sentiment.
The Baltic Dry Index (BDI) then jumped by 4.04% or 67 points day-on-day to 1,725 readings due to the new bookings done at higher rates.
Catch-up for Brazilian shipments
Brazilian iron ore shipments normally peaked during the second half of the year, but none expected a flurry of fixtures to be done at such short span of time.
Brazilian miner, Vale had completed the fixture of around 10-15 vessels for late Sep laycan, and many market participants expected more shipping demands from other Brazilian miners as well, especially for October laycans vessels.
Thus, the indicative freight levels heard on the Brazil-to-China route were heard to be at the $21/wmt to high-$21/wmt range for end-October dates.
Meanwhile, the cargo list in the Pacific remained healthy, though it resulted in fewer fixtures as compared to the Brazilian shipments. For instance, Rio Tinto was heard to fix around three ships from Dampier to Qingdao for mid-October laycan at around $8.65-$8.70/wmt level.
Despite the good fixtures, many trade participants expect thinner activity ahead, due to the absence of Chinese participants from their weeklong holidays in early October.
VLSFO prices drop on lower demand
VLSFO prices slipped into the red and dropped by $2.50/mt day-on-day to $333.50/mt at the port of Singapore, reversing from previous day-gain of the week.
The low bunker demand followed market uncertainty over second wave of coronavirus outbreak, that resulted in countries to impose strict lockdown policies that affected economic activities and oil consumption.
According to consultancy firm, Blue Insight, global demand of bunker had dropped by 9% year-on-year in the Q2 2020, and market participants were bearish for the subsequent quarters later in year due to the ongoing pandemic.