Capesize freight rates rose on bullish market sentiment, as market participants expected more shipping demand for the new year.
The Capesize 5 time charter average then went up slightly by $23 day-on-day to $16,656 on Monday, after the Jan contract traded high up to the $14,800 level.
The Baltic Dry Index (BDI) also moved upward slightly by 0.59% or 8 points to 1,374 readings, due to market optimism.
Market optimism for the new year
There was overall healthy cargo list for the Pacific basin, where there were some coal shipping demands from moving Indonesian and Russian coals.
Most of the trade participants welcomed the news as coal shipping had taken a downturn since the Chinese informal import ban on Australian coals late last year.
Meanwhile, there was some concerns over shipping crew changes, which were halted by the rise of Covid cases in the Philippines, where most of the seafarers came from.
In the meantime, the Atlantic seemed to move at slower pace, as trade participants expected the rainy season in Brazil to slow down iron ore exports.
Going forward, market participants expected freight rates to firm up in view of the thin ballasting list in the January loading window.
Bunker prices support freight rates amid mixed outlooks
The higher bunker prices had lent some support to the freight rates, as the price of VLSFO rose by $10/mt to $424/mt at the port of Singapore.
Despite the higher bunker prices, the oil demand outlook for first half of 2021 were mixed, in view of prolonged lockdowns from the rising coronavirus cases.
The oil demand outlook also suffered from the indecision of OPEC + on whether to increase crude output in February 2021, as the market expected a gradual recovery by the second half of 2021.