Capesize freight rates rebounded in the volatile market, as shipping demand improved with better market confidence.
The Capesize 5 time charter average, then went up slightly by $703 day-on-day to $32,079 on Wednesday, with small gains seen in both basins.
The Baltic Dry Index (BDI) then spotted slight gain of 0.90% day-on-day, up 28 points to 3,147 readings, due to better freight rates.
Market confidence returns amid volatile session
Some trade participants believed that the worst was over for the freight market, with moderate shipping demand returning to both the Pacific and Atlantic basins.
For instance, shipping activities burst into life in the Atlantic market with more fronthaul and fresh shipping demand on the trans-Atlantic routes.
On the contrary, the Pacific market was more muted but spotted healthy cargo demand to offset the high tonnage supply, especially in the key west Australia to China route.
However, some trade participants felt that the freight market was not out of the woods yet, as the session remained volatile with slower shipping demand.
Bunker prices flat amid firm crude prices
The bunker prices were flat after recent rally, as the price of VLSFO were unchanged at $534.50/mt in the port of Singapore.
The bunker prices were affected by recent low shipping demand despite market optimism on global oil recovery, after the Energy Information Administration reported a crude oil inventory draw of 7.6 million barrels for the week ended on June 18.
The inventory draw had aligned with market expectation but exceeded previous market estimate weekly draw of 3.625 million barrels.
Thus, some market participants saw the draw as another proof of the growing oil demand, which Bank of America expected Brent crude prices to top $100 per barrel in 2022.