Capesize freight rates continued its upward climb on bullish market sentiments with firmer Pacific market.
The Capesize 5 time charter average then rose by $708 day-on-day to $19,015 on Tuesday, with the September contracts reaching a high of $23,100, while the October contracts at high $23,150.
Riding on the good freight rates, the Baltic Dry Index (BDI) rose by 1.81% day-on-day to 1,518 readings.
Improving freight rates on better shipping demand
The healthy demand in the Pacific had resulted Rio Tinto to fix a few sips for the early September laycan for the key west Australia to China route.
However, there were some market concerns over the Typhoon Bavi which is expected to make landfall in South Korea and might disrupt shipping operations in the region.
In the meantime, some market participants expected higher shipping demand to China due to the typical peak steel season during the Sep-Oct period.
Meanwhile, the Atlantic market seemed more subdued with thin trading activities as market participants were waiting for clearer market directions after the fixing spree last week.
Bunker prices rise on higher crude oil prices
VLSFO prices rose by $4 day-on-day to $350.50/mt at the port of Singapore, following the uptick in crude oil movement.
Due to Hurricane Laura, most of the US oil producers had suspended oil output in the Gulf of Mexico, giving a price boost to crude oil.
Moreover, the American Petroleum Institute (API) reported a draw of in crude oil inventories of 4.524 million barrels for the week ending August 21, much higher than market estimate of a draw around 2.670 million barrels.
The higher than expected crude oil draw implied better oil demand amid the coronavirus pandemic and lifted crude oil prices.