The Baltic Dry Index, a measure of commodity shipping costs, jumped for a fourth session in London as iron ore demand strengthened.

According to the Baltic Exchange in London, gauge rose 98 points or 4.6% to 2,212 points. Iron ore-carrying Capesize vessels jumped 13% to USD 24,153 a day.

Mr Kjetil Sjuve director at Oslo based shipbroker Lorentzen & Stemoco AS said that “It’s more demand for iron ore generally” that’s driving up shipping rates. He said that Australian and Brazilian companies may be stepping up shipments of the steelmaking raw material after they held back supplies last month.

According to customs data, China’s iron ore imports gained 8.5% to 51.2 million tonnes in July, from 47.2 million tonnes in June. Steel prices in the country have risen for three straight weeks, indicating demand for the metal is picking up.

Pareto Securities AS said that demand to load Capesize in both the Atlantic and Pacific Oceans had a very active start to the week.

According to the exchange, Panamax added 2.3% to USD 21,411 a day, Supramax climbed 0.4% to USD 18,076 a day and Handysizes climbed 0.3% to USD 14,330.

Today’s moves mean it costs 13% more to hire a Capesize than a Panamax. That will likely move to about 25% later this year because Capesize are able to ship larger cargoes.

(Sourced from Bloomberg)