Capesize freight rates rose further on tight vessel supply and a flurry of trades done for the June contracts.
The Capesize 5 time charter average, then rose by $1,777 day-on-day to $34,531 on Wednesday, after a bullish trading session.
The Baltic Dry Index (BDI) then rose by $94 day-on-day, or up 3.04% day-on-day to $3,189, due to better freight rates.
Freight rates rise from limited tonnage availability
Freight rates were bullish on better shipping demand especially in the Pacific market, where lots of charterers reportedly needed vessels amid thin tonnage lists.
Hence, more shipowners were happy to keep vessels in the Pacific and thus allowing lesser vessels to ballast out of the Pacific to head toward Brazil.
Some charterers were also heard to hold back their demand to cool the market, as there were only a few vessels available for early June loading dates out of Western Australia.
Bunker prices hike on tight supplies
The bunker prices remained bullish on tight supplies, as the price of VLSFO dropped by $1.50/mt to $931.50/mt in the port of Singapore.
The stock inventories of HSFO were limited in the port of Singapore, which extended the lead time to almost two weeks. In the meantime, buyers’ confidence had restored, due to no cases of fuel contamination being reported recently.
Meanwhile, the fuel prices had been affected by further interest rate hikes as the US Federal Reserve pledged to fight inflation with raising of interest rates. This will then appreciate the US dollar further and increase exchange rate costs for the Brent and the other commodities denominated by US dollars.