Capesize freight rates continued its upward momentum, though at slower rate amid tight shipping tonnage with heavy congestion at Chinese ports.
The Capesize 5 time charter average, then rose by $764 day-on-day to $51,472 on Tuesday, despite some standoff between the charterers and owners.
The Baltic Dry Index (BDI) then hiked up higher at $4,201, up 1.30% day-on-day, due to the freight rally.
Tight tonnage from port congestion in China
The freight rates started to move sideways as the rally started to lose steam, despite tighter shipping tonnage from the heavy port congestion in China.
The port congestion mainly concentrated at Chang Jiang Kou (CJK) area of China, as state authority imposed 14 days of quarantine for all boarding workers to prevent the spread of Covid Delta virus.
However, some market participants observed that there was a growing list of ballasters heading west of Singapore, despite healthy cargoes list in the Pacific basin with fresh shipping enquiries from Australia, Indonesia and Malaysia.
Meanwhile, the freight rates movement started to slow down in the Atlantic basin with lesser fixtures being confirmed, though demand remained firm for the Atlantic Fronthaul and Trans-Atlantic trips.
Bunker prices rebound on positive market indicators
The bunker prices rebounded further on better market outlook, as the price of VLSFO rose by $15.50/mt day-on-day to $520/mt in the port of Singapore.
Bearish market sentiments changed toward optimism as China re-opened its once-closed Ningbo port, after a two-week shutdown to contain Covid Delta spread.
Brent crude prices also hovered at the firm $70 per barrel mark, after API reported a 1.6 million barrels decline in crude stockpiles last week, indicating better fuel consumption.