Capesize freight rates rallied on bullish shipping outlook, despite corrections in iron ore and bunker prices.
The Capesize 5 time charter average then hiked up by $1,032 day-on-day to $16,170 on Tuesday, due to better market sentiments in both basins.
The Baltic Dry Index (BDI) also rose by 2.59% or 48 points to 1,901 readings, amid improving freight rates.
Better shipping outlook in both basins
The cargo list remained strong in the Pacific market with many fresh shipping inquiries from key route of western Australia to China.
Due to the good shipping demand, the tonnage list had gotten tighter, which some vessels were heard to divert from East Coast India to be used for west Australian shipments.
Meanwhile, the Brazil’s long ballaster list had also been reduced by shipping demand out of West Africa, though shipping activities were hampered by rainy season in Brazil.
Despite the improvement in shipping fundamentals, trade participants were concerned over recent drop in iron ore prices, due to steel production restriction in Tangshan.
Bunker prices slip further on softer crude prices
Bunker prices continued to slide amid lower crude prices, as the price of VLSFO plunged down by $10/mt to $525/mt in the port of Singapore.
Crude oil prices dropped toward $67 per barrel soon, after reaching $70 per barrel due to a botched drone attack on Saudi Arabia’s oil facilities.
Further oil price correction is expected as trade sources believed more increase in US crude supplies in coming weeks, as some refineries did not return to full operation after the winter storm in Texas.