Baltic index rises further on Pacific demand

The Baltic Dry Index, a measure of commodity shipping costs, rose 1.8 per cent in London for its third consecutive advance as BHP Billiton Ltd led an increase in vessel demand in the Pacific.

The benchmark for coal, iron ore and grains freight prices on international trade routes jumped to 7,557 points in London, compared with 7,420 points on Thursday, according to the Baltic Exchange. Hire rates advanced for the largest ship classes and fell for the smallest.

'It's been very active in the Pacific,' Viktor Baranskiy at Odessa-based Industrial Carriers, the Ukraine's biggest shipper, said on Friday. He was talking about the largest ships, called capesizes.

Rates for the vessels, used to haul about 170,000-tonne cargoes, climbed after BHP, the world's largest mining company, hired five of them on Thursday and Industrial Carriers, which had sales of US$1 billion last year, also booked three in three days, Mr Beranskiy said.

Capesizes gained 12.9 per cent over the past two sessions, trading at US$140,000 a day on Friday, according to the Baltic.

China shut steel mills and factories to cut pollution and ease power shortages during the ongoing Olympic Games. The country is the largest consumer of industrial metals. Ships hired now will deliver their cargoes after the Games end on Aug 24. Derivatives contracts indicating future freight prices fell for the remainder of this year and all of 2009, data from Oslo-based broker Imarex showed.