Capesize rates continued to chase new height for the year, buoyed by the strong shipping and iron ore demand.
The Capesize 5 time charter average rose by $4,250 day-on-day to $19,036 on Wednesday, another year-high as the paper market saw over 8,000 lots change hands by the close of trading day.
Likewise, the Baltic Dry Index (BDI) jumped up to 1,246 points, up 18.22% day-on-day in a biggest day surge in 2020.
Bullish Pacific and Atlantic markets
In the Atlantic markets, the prompt tonnage list was well-digested on the back of robust iron ore prices
Due to the good shipping demand in Brazil, many shipowners had sent more vessels ballasting there to compete for the August-loading cargoes rather than for the July shipments.
As such, the freight rate for a Capesize ship to move iron ore from Tubarao to Qingdao was assessed at $19.40/wmt on Wednesday, up $3/wmt day-on-day.
Pacific market also saw higher rates, especially for key route like west Australia to north China, which jumped by $1.75/mt day-on-day to $8.25/mt, the highest level since 13 Dec 2019.
Despite the high rates, some tonnages were pulled away from the Australia market and headed toward Brazil to benefit from rising Brazilian iron ore cargo volumes.
Higher bunker prices for second consecutive day
VLSFO prices continued to rise for the second consecutive day by $8.50/mt to $331.50/mt at the port of Singapore, following the upward movement in oil prices.
Brent crude prices continued to hover above the $40 per barrel level and inched toward $41 per barrel, while the WTI stayed above the $38 per barrel level.
The price uptick was due to lower buildup of the fuel inventories at 1.2 million barrels for the week ended on 12 June 2020, as compared to previous weekly volume of 5.7 million barrels buildup, based on data from Energy Information Administration.