Capesize freight rates continued to rally on better shipping demand and higher commodity prices, though some trade participants deemed the rally as short-lived due to coming holidays.
The Capesize 5 time charter average, then grew by $1,421 day-on-day to $33,631 on Tuesday, as the paper market turned bullish after a positive start at the week.
The Baltic Dry Index (BDI) then rose by $70, up 2.65% day-on-day, to $2,715, due to better freight rates.
Better weather conditions to ease shipping
Freight rates extended its upward momentum with less weather-related delays that disrupted tonnage supply and allowed ports to reopen in Asia.
However, most of the shipowners preferred Pacific short trips like for 30-days rather than long ballasting or backhaul trips in view of the coming holidays season.
Thus, there might be further tonnage build up in Asia over near term that weighed down freight rates and offsetting any recent gains in the market.
Bunker prices rise despite release of strategic petroleum reserves
The bunker prices rose on stronger crude market, as the price of VLSFO rose by $1/mt to $612/mt in the port of Singapore.
The release of strategic petroleum reserves seemed to have little impact in bringing down crude prices, as the US sanctioned 50 million barrels, much lesser than the 60 million barrels anticipated by the market.
However, the US release will act as a start, as other countries like UK, Japan, South Korea, India, and China had heeded to the call to release their strategic petroleum reserves shortly to calm crude prices.