Capesize freight rates remained under pressure as Chinese trade participants prepared for Lunar New Year celebrations.
The Capesize 5 time charter average then dipped slightly by $110 day-on-day to $12,662 on Friday, due to thin market activities.
The Baltic Dry Index (BDI), however rose slightly by 0.45% or 6 points to 1,333 readings, due to the higher bunker prices that supported freight rates.
Winding down for Lunar New Year holidays
Shipping activities had slowed ahead of the Spring Festival celebration as most Chinese trade participants had closed their books in preparation for holidays celebration in mid-February.
Despite the slow trading activity, the Pacific market maintained some decent demand as mining major like Rio Tinto and ship operator were heard to secure fixtures for late Feb laycan for the key west Australia to China route.
However, there was some market concerns over the high vessel supply concentrated at western Australia waiting for iron ore loading for post-Lunar New Year demand.
Meanwhile, the Atlantic market moved in backwardation with market concerns over the growing ballasting tonnage list off Brazil, especially for the end-Feb laycan.
Higher bunker prices to support freight rates
The strength of rising crude oil prices caused bunker prices to rally, as the price of VLSFO rose further by $8.50/mt to $486/mt in the port of Singapore.
Market participants were optimistic over oil demand with better US economic data that indicated that the economy had turned around.
Thus, Brent crude prices went up to a year-high toward the $60 per barrels level, in view of improvement in global economies and extended supply cut of the OPEC +.