Capesize freight rates continued to push forward with firm support from smaller vessels, amid market expectation of more iron ore shipments in Q2.
The Capesize 5 time charter average then inched up by $314 day-on-day to $19,751 on Monday, despite thin market activities at the start of the week.
The Baltic Dry Index (BDI) also went up higher by 1.67% or 38 points to 2,319 readings, supported by the bullish Panamax and Supramax market.
Returning shipping demand in the Pacific
Iron ore shipping demand went to a healthy level in the Pacific basin, with mining majors like Rio Tinto and FMG seeking for vessels actively in the market.
However, most shipowners were in collecting mood and prefer to wait for clearer market directions, before making commitment.
There were also market concerns over coal shipments from eastern Australia due to the flood that disrupted logistics and railways. Thus, trade participants were increasingly seeking for Indonesian coals to fill in the supply gap.
Meanwhile, things were quieter in the Atlantic market, due to an increase of ballasters over the weekend. Despite of that, market participants were still hopeful for more iron ore shipments in Q2 to absorb the excess supply, as the weather conditions improved in Brazil.
Bunker prices spot small gain over market optimism
The bunker prices rebounded with small gain, as the price of VLSFO inched up by $1.50/mt to $495.50/mt in the port of Singapore.
The uptick was attributed to market optimism over oil demand, as refiner, Saudi Aramco stated that the global oil demand was on track to achieve 99 million barrels per day by the end of 2021, in expectation of strong oil demand during the second half of year.
Moreover, the fast vaccination program shown by the US and the UK might ease more travel restriction and boost oil demand in aviation travels.