Capesize freight rates inched up despite muted shipping activities, except for key shipping routes of the west Australia and Brazil to China.
The Capesize 5 time charter average then hiked up by $384 day-on-day to $15,469 on Tuesday, after a quiet start to the week with small trading volume in between.
The Baltic Dry Index (BDI), then rose slightly by 0.53% or 7 points to 1,330 readings, amid thinner shipping activities prior to holiday season.
Improving Pacific market on healthy cargo volume
The Pacific market turned for the better with healthy cargo demand, which saw major miners like Rio Tinto and BHP fixed some vessels for the Western Australia-Qingdao routes for January laycan at around mid-$7/wmt.
The demand for iron ore shipment remained strong, though some trade participants were concerned over the high iron ore prices which might deter further restocking activities in China, as importers waited for price correction of seaborne cargoes.
Shipping activities were rather quiet in the Atlantic market as well, except for the Brazil to China route, where Vale was heard to fix several vessels.
Going forward, market participants expected freight rates to improve further from the thinner ballaster list, as fewer vessels were slated to arrive in Brazil before Jan 20.
Bunker prices inch up despite concerns over new coronavirus strain
Bunker prices moved upward slightly in the choppy market, as VLSFO rebounded from losses and hiked up by $0.50/mt to $395.50/mt at the port of Singapore.
The recent optimism on recovering oil demand took a downturn, as market participants were concerned about the impact of new coronavirus strain that resulted more lockdowns in Europe.
This caused Brent crude oil price to slip from the $50 per barrel mark, implying softer oil demand ahead. In the meantime, the oil supply did not adjust to the reduced oil demand, as OPEC + seemed likely to go ahead another 500,000 bpd increase of oil production in February 2021.