Capesize rates rallied on bullish market sentiments after strong gains seen in both the Pacific and Atlantic basins.
The Capesize 5 time charter average surged by $1,308 day-on-day to $26,672 on Tuesday, despite the lagging Q4 and Cal 21 contracts in the future market.
Buoyed by the Capesize rally, the Baltic Dry Index (BDI) continued to chase new height and rose by 3.79% to 1,617 points by Tuesday.
Strong iron ore shipping demand
The Capesize rally was attributed to the robust iron ore demand, which hovered above the $100/mt level for over three weeks.
The high iron ore prices kept the momentum on major miners in seeking vessels to move iron ore for the key west Australia to China route.
All three majors. Rio Tinto, BHP and FMG were active in the freight market and the indicative freight heard on the west coast Australia to Qingdao route was in the $9.25/wmt to $9.60/wmt range.
Likewise, the high iron ore prices lifted freight rates on the key Brazil to China route which the indicative freight was heard to be at the $18s/wmt to $21/wmt range.
Bunker prices rise amid market optimism
VLSFO prices rose by $4.50/mt to $338.50/mt at the port of Singapore, due to market optimism over oil demand.
Brent Crude prices seemed to stabilize at the $42 per barrel level, while the WTI slipped toward $39 per barrel level.
Despite the mixed crude oil movement, trade sources expected oil demand to recover as global economies try to recover to pre-Covid 19 level. Thus, some analysts estimated crude prices to hit $50 per barrel by the end of the year.