Capesize freight rates continued to climb from strength to strength with robust market support of moving Australian coals into Europe.
The Capesize 5 time charter average, then jumped by $2,740 day-on-day to $13,598 on Thursday, despite support from the high bunker prices.
The Baltic Dry Index (BDI) also increased by $146 day-on-day, or up 5.71% day-on-day, to $2,704, due to better freight rates.
Freight rates weigh down by high bunker prices
Freight rates had improved with healthy demand from hauling coal cargoes to European market, as countries tried to diversify from Russia’s energy products in protest to the invasion in Ukraine.
However, the huge swing of bunker prices added to the volitivity of the freight rates, though the time charter rates had been relatively stable, according to the Platts report.
Moreover, there was also fresh enquiries to move iron ores from the western Australia as the peak Chinese construction season began and needed more shipments amid favourable shipping weather conditions.
Bunker prices correct after rally
The bunker prices scaled down after the hype around Russia-Ukraine conflict, as the price of VLSFO dropped by $50/mt to $980.50/mt in the port of Singapore.
The bunker price volatility was driven by swinging crude prices, as the US pressed for sanction on Russian oil and gas products, which supplied nearly 30% of European countries’ gas need.
Some European countries were likely to follow US lead and might reduce their energy dependance on Russia’s oil and gas further, which will inevitably lead to another oil price hikes as supplies tightened.