Capesize freight rates continued to rise by the firm Pacific basin, despite market uncertainty over the Chinese property sector.
The Capesize 5 time charter average, then rose by $2,474 day-on-day to $56,269 on Tuesday, despite the absence of some Chinese trade participants on holiday celebrations.
The Baltic Dry Index (BDI) then jumped by $106, up 2.46% day-on-day, to $4,410, from improving freight rates.
Not much impact from liquidity crisis on Chinese property market
Freight rates did not overreact to the $300 billion debt problem faced by China’s property giant Evergrande group, at least the contagion had not spread to shipping sector yet.
Shipping rates were still very much supported despite declining iron ore prices and ongoing steel output cuts in China.
However, iron ore shipments remained firm in the Pacific market with mining majors moving iron ore cargoes as they ramped up output and catch up with shipments, unaffected by weather related problems.
Similarly, the Atlantic market enjoyed healthy shipping demand to move iron ore cargoes from Brazil, as miners speeded up shipment to fulfill their annual guidance.
Bunker prices rise on growing consumption
The bunker prices maintained upward climb on firm crude market, as the price of VLSFO rose by $3/mt to $556.50/mt in the port of Singapore.
The crude market was largely unscathed from possible default from China’s largest property developer, which was labelled as the next ‘Lehman Brother’ moment.
As the crude market continued to suffer from tight productions from the devastating effects of Hurricanes, which resulted in lower US crude stockpiles.
Meanwhile, the market was also boosted by the easing of travel restriction in the US, which may consume additional around 200,000 barrels per day of jet fuel.