Capesize freight rates improved on better shipping demand in both the Pacific and Atlantic basins.
The Capesize 5 time charter average then went up by $288 day-on-day to $17,598 on Thursday, due to the tighter Atlantic market.
The Baltic Dry Index (BDI) also rose higher by 1.61% or 23 points to 1,448 readings, due to improving Capesize freight rates and the robust grain demand that supported higher Panamax rates.
Demand picking up amid tighter tonnage
There was more improvement in the Pacific market, due to fresh iron ore cargoes demand emerging out at the start of the year
Meanwhile, the tonnage list had shrunk due to more potential Chinese port closures from the unfavorable weather conditions that supported freight rates.
Likewise, the Atlantic market saw much improvement as well, due to the thinner ballasters list, though the market were concerned over the rainy weather in Brazil that might disrupt iron ore shipments and production.
Firm bunker prices lend supports to freight rates
The higher bunker prices continued to support firmer freight rates as the price of VLSFO rose by $3/mt to $433/mt at the port of Singapore.
The rising bunker prices followed the higher oil demand as the colder than usual winter caused an uptick of oil, natural gas and coal demand for heating purposes in the northern hemisphere.
Thus, the International Energy Agency (IEA) expected oil demand to grow by 5.7 million barrel per barrel year-on-year to 96.9 million in 2021, in line with higher economic growth of 5.2% this year, according to estimate by International Monetary Fund (IMF).