The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk commodities, rose on Tuesday on stronger rates for capesize and panamax vessels.
The overall index, which factors in rates for capesize, panamax, supramax and handysize shipping vessels, was up 20 points, or 2.19 percent, at 932 points.
The capesize index gained 51 points, or 5.47 percent, to 984 points.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, were up $391 at $8,171.
Strong Chinese steelmaking margins continue to drive higher levels of production which, along with induction furnace closures should continue to support demand fundamentals in the dry bulk market, Clarksons Platou Securities analysts said in a note.
China’s iron ore futures soared as much as 6.7 percent on Tuesday to their highest in 2-1/2 months as speculative investors placed heavy bullish bets on higher demand as mills in the world’s top steel producer churn out record volumes.
Iron ore shipments account for around a third of seaborne volumes on the larger capesizes.
The panamax index was up 24 points, or 2 percent, at 1,226 points.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, increased $192 to $9,827.
“Despite recent select restrictions on low quality coal imports, Chinese coal demand remains relatively strong due in part to the lingering heat wave fueling firmer electricity consumption thus far into the summer,” analysts at Clarksons added.
Among smaller vessels, the supramax index gained 10 points to 786 points, while the handysize index rose three points to 492 points.