Capesize freight rates dipped slightly as the index flattened after much improvement with support from the rising bunker prices.
The Capesize 5 time charter average then dropped slightly by $30 day-on-day to $12,772 on Thursday, after much improvement seen in the February contracts.
The Baltic Dry Index (BDI) then remained flat at 1,327 readings after much improvement in the freight rates.
Freight stabilization in both basins
After the recent weakening rates, the freight rates began to stabilize in both basins, supported by bullish sentiment in the spot physical market.
However, market participants expected weak shipping demand out of Brazil, especially for the March laycan, due to rainy season and the lengthy ballaster list.
Meanwhile, there was fresh cargo inquiries in the spot Atlantic market, which lifted freight rate for the February-loading window.
The Pacific market continued to strengthen by healthy cargoes demand for iron ore and coal, though there was some resistance from shipowners for the Pacific trips.
Nevertheless, the indicative freight had inched up and heard to be at the range of $5.95-$6.10/wmt for the west coast Australia to China route.
Rising bunker prices to support freight rates
The recent high bunker prices had lifted freight rates, as the price of VLSFO rose further by $4/mt to $477.50/mt in the port of Singapore.
Brent crude prices headed toward the $60 per barrels level, as OPEC + extended their output cut to support higher oil prices, amid gradual global economies recovery.
Good US economic data also supported the market optimism with the high US factory orders that rose by 1.1%, beating market expectation, while a drop was recorded in the number of people applying for new unemployment benefit applications.