Capesize freight rates continued to gain upward momentum on improving physical market and market optimism.
The Capesize 5 time charter average then inched up by $124 day-on-day to $12,021 on Monday, due to better freight rates in both basins.
The Baltic Dry Index (BDI) followed the market positivity and went up by 1.83% or 21 points to 1,169 readings, getting support from improving freight rates.
Shipping delays over unfavorable weather in China
The Pacific market continued to strengthen over healthy cargoes list, while there was market talk of supply constrain due to the bad weather in China that might cause vessels delays.
Freight rates for the west Australia to China routes had also improved with competitive biddings from mining majors like Rio Tinto and FMG.
As such, the freight rate for a Capesize ship to move 170,000 mt of iron ore on the Port Hedland-Qingdao route was gauged around $7.10/wmt, up 15 cents/wmt from Nov 20, based on Platts assessment.
Meanwhile, the Atlantic market remained muted amid the oversupplied market that lowered freight rates.
However, some trade sources expected more shipping demand in near term as the Brazilian miners tried to increase their shipments to catch up with their annual export targets.
Bunker prices rally on better oil market
Bunker prices continued to rise on higher crude prices movement, as the VLSFO increased by $8.50/mt to $374.50/mt at the port of Singapore.
The oil market continued to benefit from the positive vaccine news on the prospect that aviation travels might return in near term and raised fuel consumption.
Moreover, the OPEC + seemed to extend production cut in January 2021 by further three months to support higher crude prices.