Capesize freight rates continued its upward momentum on improving shipping demand in the physical market, especially in the Atlantic market.
The Capesize 5 time charter average then went up by $317 day-on-day to $14,143 on Thursday, buoyed by market talks of miners seeking for tonnage bullishly in near term.
The Baltic Dry Index (BDI) also went up slightly by 0.39% or 5 points to 1,301 readings, due to better shipping outlook.
Tighter tonnage for Atlantic market
The Atlantic market continued to drive market forward, with several fixtures done at higher rates, as operators sought for vessels at the second-half Jan laycan on the Brazil-China route at the range of high-$14s/wmt to $15/wmt.
Thus, shipping fundamentals began to look better for mid-Jan laycan at the key Brazil to China route, due to tighter tonnage supply, after being digested by recent iron ore shipping demand.
However, the ballaster list remained high at the late January window, which may pressurize further freight rate corrections.
Meanwhile, the pick-up of bauxite shipping demand also further digested tonnage supply, though the shipping activities were slow in South Africa to tighten the tonnage supply further.
On the contrary, the shipping activities were muted in the Pacific market, even though major miners like Rio Tinto and BHP were active in the market.
There was also some coal shipping demand from Australia, Indonesia and Russia to digest tonnages in the Pacific basin.
Bunker prices rise as crude oil price hits 9-month high
The rising bunker prices continued to support freight rates as well, with the VLSFO surged up by $7/mt to $403/mt at the port of Singapore.
The bunker prices rally was driven by the higher crude oil prices that reached nine-month high with Brent crude price touching $51 per barrel this week.
Some market participants credited the rising crude prices to the US crude inventory draw and a weak dollar. However, the market optimism on returning oil demand after the vaccination, also played a significant role for the improving oil market outlook.