The Baltic Dry Index (BDI) has surged on Tuesday, March 7 to a new twelve-week high of 1,033 points, up by 54 points when compared to last week.
The rise has been driven by an increase in rates across the sector, but spurred primarily by Capesizes.
Specifically, the Capesize index jumped by 211 points to 1,556 points, with spot rates averaging at USD 11,866, also up by USD 1,427.
The Supramax index also experienced growth but somewhat smaller at 40 points totaling in 1,194 points, whereas the Supramax index increased by 9 points resulting in 861.
Panamax rates averaged at USD 9,592, up by USD 321, while average rates for Supramaxes stood at USD 8,998, up by USD 93.
The rebound in rates has brought the much needed ease for bulker owners whose earnings bottomed out last year, with Capesizes earning USD 2,286 and Supramaxes USD 4,032. Panamax owners were hit the most with rates standing at USD 3,393 a year ago.
Rate increases are seen as the much needed signs of dry bulk shipping market’s recovery expected in 2017 onwards as supply-demand gap continues to narrow.
According to the shipping consultancy Drewry, demand is projected to grow at a healthy pace of 3% from a rise in iron ore and thermal coal trade, while supply could grow by about 1% from 2017 amid high scrapping and a thin orderbook.
Additionally, a contracting orderbook and low future new orderings due to limited financing availability are projected to keep a check on future deliveries.