Capesize freight rates continued upward momentum amid bullish iron ore outlook and good Chinese pre-Labour Day restocking activities.
The Capesize 5 time charter average then inched up by $585 day-on-day to $35,347 on Monday, due to better market outlook.
The Baltic Dry Index (BDI) then rose slightly by 0.72% or 20 points on-day to 2,808 readings, due to positive physical outlook.
Bullish iron ore demand to lift freight market
With iron ore prices reaching to record high again, the physical outlook became promising with bullish seaborne iron ore shipment demand and robust Chinese steel demand.
However, there was concerns over rising Covid cases in India which might affect steel and raw materials demand.
Nevertheless, the Pacific market maintained a healthy cargo list, supported by good pre-Labour Day restocking among Chinese trade participants, while major miners like Rio Tinto and FMG continued to seek vessels for the key western Australia to China route.
On the contrary, the Atlantic market saw little activities as most trade participants were in collecting mood, though many participants expected Vale to increase exports later to catch up with lacklustre shipments back in Q1.
Bunker prices dip over rising India’s virus outbreak
Bunker prices moved downward over demand concerns, as the price of VLSFO fell by $8/mt on-day to $488.50/mt in the port of Singapore.
The rising Covid cases in India cast a bearish market sentiment on oil demand, as oil consultancy firm, FGE estimated a drop in Indian diesel demand by 220,000 bpd in April, and over 400,000 bpd in May.
Despite the negative oil outlook, OPEC+ remained optimistic about the global oil demand recovery for the year and might make some adjustment on planned production increases after assessing the situation in India.