The Baltic Exchange's main sea freight index jumped about 11% to its highest in nearly three months on Friday as high Chinese coal demand drove up capesize rates.
The Baltic dry index, which tracks rates for capesize, panamax and supramax vessels, leaped 158 points, or nearly 11%, to 1,606, its highest since Oct. 14, 2020.
The main index was up about 17.6% for the week, its highest jump since early October last year.
The capesize index jumped 426 points, or about 20%, to 2,548, a peak since Oct. 15, 2020.
The index firmed about 27% this week, its best weekly performance in over three months.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, gained $3,533 to $21,131.
China's iron ore futures marked their first weekly gain since mid-December as steel mills and traders replenished stocks of the steelmaking ingredient ahead of the Lunar New Year holiday.
A cold spell in China and off-season, record high demand for power across Chinese grids have caused the sharp jump in the capesize index, said Peter Sand, chief analyst for shipping association BIMCO.
However, it is not expected to sustain as it is a very volatile segment, Sand added.
Exceptionally cold weather has caused a huge increase in power demand in the world's largest energy consumer.
The panamax index rose 55 points, or 3.7%, to 1,559, its highest level since Sept. 2, 2020.
The index rose 17.66% this week, its most since Aug. 7, 2020.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 tonnes to 70,000 tonnes, gained $498 to $14,031.
(Reporting by Bharat Govind Gautam in Bengaluru; Editing by Shinjini Ganguli)