Capesize freight rates rallied on more shipping activities as trade participants returned from holidays amid improving demand.
The Capesize 5 time charter average, then rose by $1,257 day-on-day to $30,640 on Tuesday, following market optimism on iron ore shipping demand.
The Baltic Dry Index (BDI) then went up to a one-month high at 3,025 readings, up by 2.75% or 81 points on-day.
Stronger fundamentals for shipping demand
After a slow start of the week, shipping demand began to roar into life with more market activities as the Chinese trade participants returned from holidays.
The Pacific market continued to see healthy demand list, as most market participants concentrated their attentions on the July laycans cargoes.
Fresh enquiries from the Japanese and South Korean end-users also lifted market sentiment further and supported better freight rates.
However, it was still a slow market for Atlantic basin, due market fundamentals had improved with reduced ballaster lists and better iron ore shipping demand for the key Brazil to China route.
Bunker prices rise on better market outlook
The bunker prices continued to inch up on better oil outlook, as the price of VLSFO hiked up by $1/mt to $529/mt in the port of Singapore.
The high bunker prices then rode on market optimism of the crude oil market, which caused Brent crude oil prices to maintain a two-year high level toward $74 per barrel level.
Hence, trading firm, Vitol predicted that Brent crude oil prices might reach between $70-$80 per barrel for the second half of 2021, on ground that OPEC retained its gradual conservative incremental of output.