Capesize freight rates continued to hike upward on better physical market especially on the improving Pacific basin.
The Capesize 5 time charter average then went up by $752 day-on-day to $17,408 on Tuesday, with bullish movements seen in the Jan and Feb contract.
The Baltic Dry Index (BDI) also rose by 3.20 % or 44 points to 1,418 readings, due to better freight rates.
More shipping demand in the Pacific
The upticks were driven by the firm Pacific basins, given more iron ore shipping demand amid supply tightness of vessels.
As most trade participants were concerned about the cold weather in East Asia which might result in port closures and shipping delays.
Moreover, the vessel supply may further tighten due to the ban over crew changes in Manila, which limited availability of vessels in the region.
On the contrary, the Atlantic market saw little improvement with lesser activities seen in the key Brazil to China route, though there was some backhaul trips out of South Africa and Brazil.
Bunker prices drop despite crude prices rally
The price of VLSFO dropped by $9/mt to $415/mt at the port of Singapore, despite the recent rally in crude oil market.
Brent crude prices moved up toward the $54 per barrel level, as Saudi Arabia volunteered to reduce oil output by 1 million barrels per day (bpd) in February and March, while the rest of the OPEC + members ramped up their production for the two-month periods.
Thus, the OPEC + production cut was confirmed at 7.125 million bpd for February, then 7.05 million bpd for March 2021.