Capesize freight rates continued to rise on the thriving FFA market, buoyed by robust steel demand in China.
The Capesize 5 time charter average then rose up by $1,858 day-on-day to $44,819 on Wednesday, due to better market outlook.
The Baltic Dry Index (BDI) also went up by 3.45% or 109 points on-day to 3,266 readings, due to better freight rates.
Strong FFA to lift market outlook
Despite the strong paper market, the physical market was rather slow in reacting to the rally, perhaps in waiting for the full return of the trade participants from holidays.
Nevertheless, most of the trade participants remained optimistic over shipping demand in moving iron ore, amid better weather conditions in the Australia and Brazil.
However, the freight rates were affected by the standoff between owners and operators in the Pacific market amid good cargo list.
Meanwhile, it was heard that trade participants were focusing on June loading laycan out of Brazil, but they were concerned about growing ballasting interests in the Atlantic market.
Bunker prices gain momentum amid firm freight rates
The firm bunker prices added on to the freight rates rally, as the price of VLSFO rose by $6/mt on-day to $516/mt in the port of Singapore.
Despite worsening infection situation in India, the global oil demand shown promises of recovery, with falling US oil stockpiles by 8 million barrels in recent week.
Market participants also expected better oil demand during summer season with the US in easing of travel restrictions, following the good vaccination rollout.