Capesize freight rates extended bullish run due to better weathers in both Australia and Brazil that facilitated in moving of iron ore cargoes.
The Capesize 5 time charter average, then rose by $1,239 day-on-day to $15,258 on Wednesday, with support from the crude prices on voyage bids.
The Baltic Dry Index (BDI) also increased by $68 day-on-day, or up 3.29% day-on-day, to $2,137, due to better freight rates.
Freight rates to keep up with crude price rally
Freight rates managed to rise in line with the surging crude prices amid market fear of tighter supply as the military conflict between Russia and Ukraine escalated.
In the meantime, market sentiment was more positive with favorable weather forecasted in Australia and Brazil, which then are less likely to delay iron ore and coal shipments.
Hence, the demand for the Pacific market remained healthy with many market enquiries to move coals from eastern Australia to the European market.
Moreover, the Atlantic saw better demand in moving iron ore out of Brazil, though some very large ore carriers were heard to ballast toward Brazil, according to Platts report.
Bunker prices rise on record high crude prices
The bunker prices hiked higher on another record-breaking levels with strong crude support, as the price of VLSFO jumped by $52.50/mt to $850/mt in the port of Singapore.
The huge single day surge was linked to the continuing Russia-Ukraine conflict, which market fear will eventually result trade sanctions on Russia crude exports, like the high sulfur fuel oil (HSFO).
Though nothing official yet for the sanction, but some major bunker players had already started to stop all trading activities with Russian energy companies from Russian and Ukrainian ports.
Some major European bunkering ports also joined in to resist Russia’s aggression on Ukraine, like Gibraltar, which banned Russian vessels for port of call and refused to provide bunkering services for any Russian-flagged vessels.