Capesize freight rates rebounded on record high iron ore prices, which showed no signs of stopping due to the robust Chinese steel demand.
The Capesize 5 time charter average then rose by $856 day-on-day to $41,514 on Monday, as market sentiment turned bullish with the meteoric rise of iron ore prices.
The Baltic Dry Index (BDI) also hiked up by 1.79% or 57 points on-day to 3,240 readings, due to better freight rates.
Rollover effect of the bullish iron ore prices to the freight market
The firm run of Capesize freight was tied with the high iron ore prices that rallied after the long holidays in early May, with the Chinese restocked raw materials for high steelmaking margins.
The Pacific market benefited from the buildup and some trade sources cited that around eight iron ore cargoes were being traded among the mining majors.
Meanwhile, some good offers were heard in the Atlantic basin for moving iron ore cargoes from Brazil to China to take advantage of the bullish iron prices movements.
There was also some market speculation over inefficiency of crew change for ships calling in India due to covid restriction that jacked up the paper market.
Bunker prices hike up amid softening crude market
The bunker prices rose despite lower crude prices, as the price of VLSFO dipped by $5.50/mt on-day to $501/mt in the port of Singapore.
Crude oil prices had softened as OPEC is estimated to ramp up oil production in April by 70,000 bpd, ahead of the planned increase of 600,000 bpd in May.
Besides OPEC, Iran had also ramped up its oil output by 80,000 bpd to a total of 2.35 million bpd in April, according to Argusmedia.