Capesize freight rates rallied on bullish market outlook with record high iron ore prices and good steel demand from China.
The Capesize 5 time charter average then surged up by $2,106 day-on-day to $37,453 on Tuesday, due to bullish market outlook.
The Baltic Dry Index (BDI) then rose by 2.88% or 81 points on-day to 2,889 readings, amid better freight rates.
Uptrend market with positive gains
The freight market made significant gains with record high iron ore prices, though there were market concerns over lower steel demand in India due to rising Covid cases.
In the Pacific market, more shipping operators and miners were active in seeking vessels to move iron ore cargoes for the key western Australia to China route.
Similarly, the freight rates had been gaining as well on tight tonnage supply and expectation of more iron ore shipments.
However, some trade sources expected more ballasters to head toward Brazil, given the lower TCE premium of Pacific trips over Brazil to China round trips.
Bunker prices rebound on OPEC+ optimistic oil outlook
Bunker prices rebounded on better crude prices, as the price of VLSFO rose by $10/mt on-day to $498.50/mt in the port of Singapore.
The rising crude prices came as OPEC+ decision to maintain with its current plan to ease oil production cut as of May, despite the escalation of Covid cases in India.
Meanwhile, global oil demand seemed to be moving in a positive direction as China’s oil demand went above pre-pandemic levels, while vaccine drives were progressing well in the US and Europe.