Capesize freight rates rebounded on tight tonnage supply because of Typhoon In-Fa’s impact on central China’s coastal areas.
The Baltic Dry Index (BDI) then increased by 3.09% day-on-day, up 96 points to 3,199 readings, due to the firmer freight rates.
Bullish Pacific amid tight vessel supply
The Pacific enjoyed healthy cargo list with miners taking vessels amid restricted vessel supply caused by the Typhoon In-Fa.
Major ports like Zhoushan were closed due to heavy rains, while roads were flooded, and transportation disrupted in the province of Zhejiang.
Meanwhile, there was some strengthening of the Brazilian market, as market participants expected more iron ore shipments demand from the miners that resulted in higher bids.
As such, the indicative freight heard on the west coast Australia to Qingdao route was in a range of $13.20-$6.75/wmt, while the freight indicated on the Brazil to China route was in a range of $26.50-$28/wmt.
Bunker prices rise to support freight rates
The bunker prices also moved up to support freight rates, as the price of VLSFO hiked up by $7/mt day-on-day to $546/mt in the port of Singapore.
The uptick followed stronger crude movement as Brent Crude oil prices went up toward the $73-74 per barrel level as lockdown measures eased in the US and Europe, giving hope for better oil demand recovery.
However, there was rising Covid cases and fresh outbreaks in Asia, which might derail the oil demand recovery and consumption.