Capesize freight rates hiked up, despite mixed market outlook with an improving Atlantic market, while limited shipping activities were observed in the Pacific.
The Capesize 5 time charter average then went up by $698 day-on-day to $13,826 on Wednesday, as the physical continued to show further gains, though it was expected to slow toward year-end due to holiday season.
The Baltic Dry Index (BDI) followed the rally and went up by 1.81% or 23 points to 1,296 readings, due to better freight rates.
Vibrant Brazil-to-China routes
The physical market continued to draw support from the rally seen in key Brazil to China route, due to thinner ballaster list.
According to trade sources, there was more ballast interests to head West, especially for the scrubber-fitted ships as the TCE for Pacific trips and Brazil China round trips was more competitive, after a few rounds of corrections.
Brazilian miners and ship operators remained active in seeking for vessels to move iron ore out of Brazil to China, at the indicative freight rates ranging at $14.25-$15/wmt.
However, thing was less promising for the Pacific market, which had a thin cargo list, though major miners like Rio Tinto and BHP remained active in market.
Meanwhile, there was some improvement to the coal shipping demand, as there were more enquires for Australian and Indonesian coal shipments to meet winter heating demand in the Far East.
Bunker prices draw support from firmer crude
The bunker prices rebounded from corrections, due to firmer crude prices, as the VLSFO inched up by $1.50/mt to $396/mt at the port of Singapore.
The rising crude oil prices was due to draw in crude inventory, which declined by 3.1 million barrels for the week ended at Dec 11, beating market estimate of a slight draw at 1.9 million barrels, according to Energy Information Administration (EIA).
Market optimism was further buoyed by a possible V-shaped oil demand recovery from the rollout of second vaccine being made available to the Western countries soon.