Capesize freight rates rebounded from losses amid a short week with holiday in Singapore and market concerns over cyclone development off China.
The Capesize 5 time charter average, then rose by $597 day-on-day to $29,139 on Monday, after some improvement in the physical market.
The Baltic Dry Index (BDI) then increased by 0.66% day-on-day, up 20 points to 3,059 readings, due to the better freight rates.
Bullish market amid short week
The paper market reflected the improvement seen in the physical market especially on the Pacific market, which recorded at number of tender cargoes and shipping demand from miners.
Thus, there were market talks of higher bids for the early August laycan on the key western Australia to Qingdao route to reach the high-$10s/mt.
There were also market concerns over potential logistics disruption from the tropical storm Cempaka formed over the South China Sea that threatened southern China provinces like Guangdong, Guangxi and Hainan island, as well as Taiwan.
Meanwhile, shipping activities moved slower in the Atlantic basin, due to the standoff between owners and charterers, though some trade sources expected some easing of the lengthy ballaster list to improve freight rates.
Bunker prices falls over weak crude market
The bunker prices continued to soften on weak crude, as the price of VLSFO fell further by $6.50/mt day-on-day to $541/mt in the port of Singapore.
Market participants expected some easing of tight supplies as OPEC reached an agreement to ramp up production by 400,000 bpd from August onwards.
However, the agreement was met with bearish market sentiments on lower oil demand due to growing Coivd Delta Variant cases in the Western and Asian countries that slowed the recovery.
Thus, Brent Crude oil prices dipped under the $70/bbl mark after recent rally that kept it above the $75/bbl level. Despite the recent bearish sentiment, Goldman Sachs predicted Brent prices to hit $80/bbl this summer by keeping faith on strong oil demand recovery.