Capesize freight rates hiked up, driven by better market optimism and strong Pacific shipping demand.
The Capesize 5 time charter average, then increased by $2,354 day-on-day to $41,324 on Tuesday, due to bullish market sentiment in the paper market.
The Baltic Dry Index (BDI) also rose by $117, up 3.62% day-on-day, to $3,352, due to better freight rates.
Pacific market strengthens with better shipping demand
Freight rates gained from a flurry of fixtures for the Pacific round trips, as shipping demand peaked during the seasonal demand of December.
The easing of the port congestions among Australian ports also resulted more trade participants to seek for vessels during the H2 December loading window to move iron ore cargoes.
Meanwhile, the tonnage list remained tight for Atlantic market, which supported higher freight rates for December laycan. Though, many charterers were heard to wait on the sidelines, while some major miners like Vale were in collecting mood for January laycan.
Bunker prices rise amid Omicron panic
The bunker prices rose on better crude prices, as the price of VLSFO rose by $2.50/mt to $601.50/mt in the port of Singapore.
Crude prices strengthened from Omicron variant fear as the strain seemed weaker than its predecessor in term of fatality and hospitalization utilization. However, some health expert warned that more time were needed for accurate assessment of the virus strain and its impact on human health.
Meanwhile, the possible fallout of the Iranian deal also supported the crude prices, as the additional Iranian crude may be delayed in entering the market or not at all.