The Baltic Dry Index (BDI) has rocketed to a four-month high as key segments of the bulker spot market post steady rate gains.
The Baltic Exchange index, a measure of broad dry bulk spot market strength, hit 1,584 points on Wednesday, a one-day gain of 3.8% and a rise of 22.7% since the same time of the prior week.
It is the highest level for the BDI since 11 May, when it touched its peak so far in 2023 before spiralling downward to a nadir of 919 in June.
“Freight rates in the various ship categories increased significantly, indicating a robust upward trend,” Signal Ocean said.
The shipping data platform’s analysts wrote in their weekly dry bulk report on Wednesday that the spot market surge comes amid optimism about Chinese economic activity thanks to stimulus measures by policymakers.
Beijing has introduced a package of measures to boost growth and support the real estate market and the yuan, including a move to cut reserve requirements for China’s banks.
“This effectively injected liquidity into the financial system, further underscoring the determination to maintain economic momentum,” Signal Ocean said.
Large bulkers continued to mount a rebound that has lasted 11 straight days, with the Baltic Exchange’s measure of average capesize spot earnings surging to just over $17,100 per day.
That marks a one-day jump of 6.4% for the 5TC route basket and a surge of 46% in a week, and it is the highest rate seen since 26 June.
Rates on the route from Brazil to China have surged, with the Baltic Exchange estimating that the voyage costs a charterer $22.38 per tonne of iron ore on Wednesday, up from $20.07 a week ago.
That surge was reflected in a charter by Bunge of Star Bulk Carriers’ 181,000-dwt Star Claudine (built 2011). In a fixture concluded on Monday, the commodities giant agreed to pay $22 per tonne to haul iron ore from the Brazilian port of Tubarao to Qingdao in China, according to Baltic Exchange data.
It was the most expensive fixture on the route since May.
But the sweeping spot rate gains have been seen across all key sectors.
Average rates on the Baltic Exchange’s Panamax 5TC route rose to nearly $15,400 on Wednesday, the highest level since mid-April.
Further down the size classes, rates on the Supramax 10TC index surged to nearly $14,600 per day, the highest level since 24 March and the continuation of a rally that has seen rate improvements every day since 24 August.
But it was the smallest bulkers that have delivered the most sustained spot market gains.
The Baltic Exchange’s assessment of average rates for handysize bulkers has risen every day since 8 August.
The route basket known as the Handysize 7TC now stands at $11,900 per day, its highest level since late April.
Congestion at the Panama Canal has helped prop up rates for much of the dry bulk sector, but the handysize sector has had the biggest impact, according to Signal.
“The increase in the handysize segment is surprising, where the daily five-day moving average has exceeded any high since the summer season,” the company said.
