Capesize freight rates continued to firm up on bullish paper market with strong gains in both basins.
The Capesize 5 time charter average then surged up by $1,719 day-on-day to $17,889 on Wednesday, due to better shipping outlooks.
The Baltic Dry Index (BDI) also hiked up by 4.16% or 79 points to 1,980 readings, amid improving freight rates.
Improving rates in both basins
The high paper market was supported by good shipping demand in the basins, with healthy cargo list in the Pacific from the iron ore and coal shipments.
The good iron ore demand led mining majors like Rio Tinto and FMG to seek for vessels for end-March laycans for the key west Australia-to-Qingdao route, at indicative freight rates of $9.50-$9.80/wmt.
Freight rates for key Brazil-to-China route also experienced more gains, especially for round trip, as the lengthy ballaster list had been reduced and diverted to shipping demand in West Africa.
Despite the improving rates, some owners and charterers preferred to stay in the sideline as they waited for the market rally to cooldown.
Bunker prices drop further on crude buildup
Bunker prices plunged further on weak crude prices, as the price of VLSFO nosedived by $14/mt to $511/mt in the port of Singapore.
The huge US crude inventory buildup had pressurized oil prices as the Energy Information Administration (EIA) recorded an inventory build of 13.8 million barrels for the week ended on Mar 5.
However, the huge crude buildup was due to lower operating rates of refineries at 69% as they tried to resume operation after the winter storm in Texas.