The ongoing conflict between Russia and Ukraine is boosting the dry bulk market to levels not seen in almost half a year, according to market watchers. The BDI exceeded 3,000 points for the first time in five months on Wednesday, backed by higher average spot rates across dry bulk shipping. The index, essentially a market barometer, reached 3,052 points on Wednesday after picking up 113 ticks to surpass this threshold for the first time in five months. The last time that happened was on 13 December when the BDI registered 3,216 points.

This milestone received support from the broader dry bulk market, which saw average spot rates improve across the board on Wednesday. “The trade disruptions and route reconfiguration due to the war in Ukraine are the main reason for the strength in dry bulk,” said John Kartsonas, founder of dry bulk ETF-trading platform Breakwave Advisors. “Coal and grains are sought after from farther away, and that creates a lot of inefficiencies in trade, which for shipping means higher prices. On top of that, capesizes tend to strengthen seasonally this time of the year, as Brazil ships more iron ore, so the combination of the two means higher rates.”

He told TradeWinds that China’s weaker demand for iron ore “is something to keep in mind” as a threat to improving capesize spot rates, but that demand is not driving the market. “For now, the strength in dry bulk is not China-related,” he said. “It is supply-driven, meaning less available ships due to longer and lengthier trips.”

Capesize rates shot up, continuing an eight-day rally during which their average figure almost doubled. The Baltic Exchange’s capesize 5TC, which averages spot rates across five key routes, leapt 8.5% on Wednesday to $31,151 per day. The figure for the capesize backhaul route from China to Europe jumped the most, rising 22.3% to $25,525 per day.

Trader Mercuria has hired an unnamed capesize on Wednesday from Swiss trader Vitol to ship 170,000 tonnes of iron ore at $35 per tonne from Tubarao, Brazilm to Qingdao, China. Loading is set for 20 to June 30. That was above the price that Louis Dreyfus Commodities paid to fix unnamed capesize owned by Classic Maritime on Thursday from Classic to ship 170,000 tonnes of ore on the same route at $32.25 per day. The average spot rate for the transpacific roundtrip voyage between Australia and China also took a nice hop, gaining 9.8% to achieve $35,417 per day.

Panamax spot rates maintained an upward trend on Wednesday that began on 26 April as the panamax 5TC improved $357 per day to reach $29,848 per day. Levels in the North Atlantic improved with talk of more enquiry for both inter-Atlantic and front haul business,” Baltic Exchange analysts wrote on Wednesday in their daily take on dry bulk shipping. “Asia sentiment was said to have remained positive in general, with enquiry from both Australia and the US West Coast remaining strong.”

The supramax 10TC picked up $135 per day to hit $30,345 per day, while the handysize 7TC edged up $77 per day to $29,969 per day.