Capesize freight rates jumped on bullish market sentiment with supports from physical fixtures on key trading routes.
The Capesize 5 time charter average then gained for the second consecutive days by $1,758 day-on-day to $13,910 on Wednesday, with better market positivity in March contracts.
The Baltic Dry Index (BDI) also rallied on better freight rates with firm support from the smaller vessel and grew by 5.38% or 90 points to 1,763 readings.
Upward momentum for freight rates
Besides the strong FFA market, Capesize freight rates also drew much support from smaller vessels like the Panamax and Supramax market.
Thus, the Pacific freight rates had strengthened with good cargoes volumes from mining majors and ship operators, with indicative freight heard on the west coast Australia to China route at the range of $8.35-$8.55/wmt.
Similarly, the freight rates increased in the Atlantic market amid healthy demand, despite lengthy ballaster list passing on the west of Singapore.
Some trade sources believed that some of these vessels will head toward India and South Africa, thus reducing the ballasters for arrivals in Brazil.
Bunker prices stabilize on better crude prices
Bunker prices stabilized on better crude prices, as the price of VLSFO dipped slightly by $0.50/mt to $501/mt in the port of Singapore.
Crude oil prices rebounded from losses due to drop in the US fuel inventories as EIA recorded distillate stockpiles plunged to almost two decades low of 143 million barrels, due to the winter storm in Texas.
Meanwhile, the OPEC+ was considering to rollover the production cuts from March into April, instead of raising output. Moreover, OPEC+ expected oil demand of 2021 to reach 96 million barrel per day, close to pre-covid level of 100 million barrel per day level in 2019.