Capesize freight rates gained further on improving physical demand toward the year end, despite some market volatility.
The Capesize 5 time charter average rose by $800 day-on-day to $14,943 on Friday, with good volume being changed hands especially for the Cal 21 and Cal 22 contracts.
The Baltic Dry Index (BDI) then went up higher by 1.84% or 24 points to 1,325 readings, due to better shipping freight rates.
Busy Atlantic, thinner Pacific market
The cargoes list remained thin in the Pacific market, though some improvement were heard, with major miners like Rio Tinto and BHP remained active in the market.
Most market participants expected slower shipping demand ahead, due to year-end holiday and thus the indicative freight heard on the west coast Australia to Qingdao route was in the $7-$7.60/wmt range.
Meanwhile, the Atlantic market remained in limelight for growth, due to limited ballasters and more demand for Brazilian iron ore shipments.
For instance, Brazil’s Vale was heard to fix vessel for January loading at higher freight rates at the range of $14.50-$16/wmt.
However, some market participants expected more market volatility in coming months, due to rainy season in Brazil, which may affect iron ore productions and exports.
Bunker prices inch up amid choppy trading
Freight rates received supports from firmer bunker prices, as the VLSFO edged up by $0.50/mt to $403.50/mt at the port of Singapore.
The market expected more improvement in oil demand with the rollout of the Covid vaccinations globally, which kept the Brent crude oil prices afloat at the $50 per barrel level.
Despite the positive market sentiments, some countries still imposed lockdowns in year-end to curb the rising coronavirus cases, which resulted in choppy trading of the oil market.