UNITED KINGDOM March 07 2016 6:16 PM

LONDON (Scrap Register): The main sea freight index at Baltic Exchange for ships carrying dry bulk commodities gained further on Friday boosted by increased demand for smaller vessels while demand for larger vessels remains at record lows.

The Baltic Dry Index, which provides an assessment of the price of moving the major raw materials – such as coal, iron ore and grain – by sea by taking in 23 shipping routes measured on a time charter basis, rose further by 7 points to 354 points on Friday.

When the last commodity bull-run was in full swing, ships were being built at high rates to meet the demand of transporting raw materials around the globe. When the Great Recession hit, demand slumped while at the same time new ships hit the market. The BDI held up better in that market than it is now, as demand from China for raw materials as the country embarked upon some strategic stockpiling buoyed the index even as equities around the globe collapsed.

The index is based on a daily survey of agents all over the world. Baltic Dry hit a temporary peak on May 20, 2008, when the index hit 11,793. The lowest level ever reached was on Wednesday, February 10 2016, when the index plummeted to 290 points.