Capesize freight rates inched up amid bullish sentiment in the paper market, though the physical market remained sluggish.
The Capesize 5 time charter average then rose by $959 day-on-day to $32,593 on Friday, as the paper market extended its bullish run.
The Baltic Dry Index (BDI) also went up slightly by 1.59% or 45 points on-day to 2,869 readings, amid improving freight rates.
Sluggish physical market despite bullish paper market
Despite the better paper market, the physical market was not out of the wood yet, with few tenders being concluded in the market.
The Pacific market seemed to perform better among the two basins, boosting decent gains after a few fixtures done on the back of healthy cargo list.
Moreover, some trade participants expected further shipping demand from the Japanese and South Korean steel mills in late May for iron ore shipments.
The Atlantic market, however came under pressure from the growing ballaster list, though market participants expected more iron ore shipments from Brazilian miners in near term to firm freight rates.
Bunker prices continue to soften in an oversupplied crude market
The bunker prices plunged down on weaker crude, as the price of VLSFO fell further by $9.50/mt to $471/mt in the port of Singapore.
The weakening crude was due to JPMorgan’s estimation of Iran to increase its crude and condensate output to 3.2 million barrels per day (bpd) from the previous 2.8 million bpd after lifting of the sanctions.
Meanwhile, some bearish market participants even estimated that Iran’s oil production might return to pre-sanctions level of around 4 million bpd over the next three months amid the already oversupplied oil market.