The Baltic Exchange's main sea freight index surged to its highest in over a decade on Wednesday, powered by a jump in the larger capesize vessel segment on increasing iron ore shipments from Brazil.
The Baltic dry index, which tracks rates for capesize, panamax and supramax vessel ferrying dry bulk commodities, jumped 238 points, or 9.6%, to 2,710, its highest since October 2010.
The index recorded its biggest daily jump since Feb. 17.
The capesize index surged 559 points, or 16.2%, to 4,014 - a peak since early October 2020.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes of coal and steel-making ingredient iron ore, jumped $4,638 to $33,290.
The capesize segment has seen more fixtures reported over the last week, especially due to more demand for iron ore from Brazil, said Rebecca Galanopoulos Jones, head of research at Alibra Shipping.
Real-time shipping data showed an improvement in cargo volumes from the world's top suppliers. Iron ore shipments by Australia and Brazil recovered last week after two weeks of declines.
Chinese steel rebar and hot-rolled coil futures closed higher on Wednesday, amid concerns of stricter capacity and output controls in coming months.
"The new week has set off with strength across both basins for sub-Capes, while capesize is expected to also gain up pace, as the dollar per tonne freight ceiling has risen higher, and a synchronous upwards trend across sizes is possible," shipbroker Intermodal said in a weekly note on Tuesday.
The panamax index jumped 133 points, or 5.2%, to a three-week high of 2,690.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 tonnes to 70,00 tonnes, climbed $1,196 to $24,206.
The supramax index advanced 52 points to 1,977.
(Reporting by Bharat Govind Gautam; Editing by Aditya Soni)
