Capesize freight rates rallied on better shipping demand, especially with more cargoes coming from the Atlantic market.
The Capesize 5 time charter average then rose by $1,037 day-on-day to $23,911 on Friday, due to market optimism for Forward Freight Agreement (FFA).
The Baltic Dry Index (BDI), however, dipped slightly after recent rally and went down by 0.14% or 3 points to 2,085 readings.
Strong May for freight market
Market participants expected a robust shipping demand in May, with more physical cargoes fixtures that strengthened the paper market.
Hence, the market optimism was supported by more iron ore shipments activities picked up in the Atlantic market, with Brazilian miner, Vale heard to be fixing several vessels recently.
Meanwhile, there was also some market enquiries on coals shipments from South Africa, asked mainly by the Indian and Chinese trade participants.
However, market activities were quieter in the Pacific basin, but it was supported by decent cargo list in the key western Australia to China route, despite cyclone concerns.
Bunker prices dip on increased supply
Bunker prices continued to slide slightly on weaker crude oil prices, as the price of VLSFO dipped slightly by $0.50/mt to $480/mt in the port of Singapore.
Market optimism of oil demand were being offset by expected increase of OPEC+ production which might rise additional output of 2 million barrel per day by the end of July 2021.
However, there was some signs of improving oil demand from India, as the country’s demand of oil products’ reached record-high in March, since late 2019, while some market participants expected higher US gasoline demand in the coming summer season.