Capesize freight rates booked gains on better market sentiment, supported by higher bunker prices and better shipping demand.
The Capesize 5 time charter average then rose by $920 day-on-day to $14,794 on Friday, due to better market sentiment from FFA.
The Baltic Dry Index (BDI) also strengthened on the better freight rates with gains of 2.81% or 50 points to 1,829 readings.
Better shipping fundamentals to firm freight rates
The Pacific market continued to see better coal shipping demands from eastern Australia and Indonesia, while iron ore shipping demand remained decent in Western Australia.
Likewise, there was some good shipping demand from South Africa and India, which cut down the lengthy ballaster list in the Atlantic market.
Meanwhile, the unfavorable weather off North China also lent some supports to freight rates due to vessel delays.
Bunker prices rally on crude price surge
Bunker prices rallied again on high crude oil prices, as the price of VLSFO hiked up further by $14.50/mt to $522/mt in the port of Singapore.
The high bunker prices are slated to push up the freight rates further, according to trade sources as Brent crude prices rose to almost two year high toward $70 per barrel after a drone attack on Saudi Arabia’s Ras Tanura port.
Though no personnel and property were reportedly damaged in the attack, but the incident spooked the market on the volatile geo-political landscape and potential supply disruption to one of the world largest oil ports in the region.