Capesize freight rates continued to rise on firmer physical Atlantic basin, despite thin shipping activities in the market.
The Capesize 5 time charter average then went up by $1,409 day-on-day to $25,557 on Wednesday, after a choppy trading session.
The Baltic Dry Index (BDI) also moved higher on improving freight rates and hiked up by 3.51% day-on-day or 62 points to 1,828 readings.
Softening Pacific rates over cyclone concerns
Pacific basin continued to extend losses due to cyclone concerns in Australia, which might disrupt loading operations.
So far, the Pilbara Ports Authority had started to clear vessels from Port Hedland in preparation for Cyclone Lucas, which is expected to make landfall on Friday.
According to Australia’s Bureau of Meteorology (BoM), the tropical low system might develop to either Category 1 or 2 cyclone, threatening iron ore production and shipping operations in the Pilbara coastal areas.
Meanwhile, the Atlantic market saw thin shipping activities amid thin ballaster list, while the standoff remained between the shipowners and charterers.
Bunker prices jump on bullish sentiment
The firmer bunker prices provided some supports for the freight rates, as the price of VLSFO rose by $5.50/mt to $457.50/mt at the port of Singapore.
The price upticks were linked to the strength of higher crude prices, which rose on bullish sentiment of the new Biden administration taking office, which may implement a $1.9 trillion package soon to boost the US economy.
Moreover, market participants expected the new US government to adopt greener, environmental-friendly policies that might resulted in further crude oil price spikes.
In the meantime, the India’s crude imports jumped to a three-year high in December 2020 to over 5 million barrels per day (bpd), due to rising domestic demand.