Capesize freight rates rose on better shipping demand in both basins and firm market outlook for Q2.
The Capesize 5 time charter average then increased by $1,506 day-on-day to $22,468 on Wednesday, with May and June contracts jumping over $25,000/day levels.
The Baltic Dry Index (BDI) also went up by 1.67% or 35 points to 2,127 readings, amid better freight rates.
A red-hot summer market ahead
Market participants were optimistic of the stronger freight market in Q2, despite some market concerns over cyclone approaching toward western Australian coast.
As Tropical Cyclone Seroja is expected to move southward from Timor, Indonesia and hit Western Australia late on Sunday or early on Monday timeframe. In the meantime, the cyclone may be joined by another two tropical lows formed off coastal Western Australia.
Due to the cyclone concerns, the bullish freight rates moved up slower in the Pacific market, while the Atlantic market was supported by good volume of fronthaul fixtures done in early April.
There were also fresh inquiries for shipping demand off South Africa, coming from Indian and European trade participants.
Bunker prices fall on softening demand
Bunker prices plunged further on softening oil demand outlook, as the price of VLSFO dropped further by $5/mt to $480/mt in the port of Singapore.
Crude oil demand was affected by higher US inventory build, after the Energy Information Administration recorded a buildup of 4 million barrels of gasoline inventory in early April.
Meanwhile, the rising Covid-19 cases and various renewed lockdowns in Europe continued to dampened oil demand outlook.