Dry bulk shipping stocks extended gains Tuesday on the back of multiple catalysts. The Baltic Dry Index climbed up 30 points to end the day at 2,277 points. The market has started to take notice of the recovery in the industry and it looks like the shipping companies are again going to make a comeback.

The great news for the global shipping market is that rising demand for oil and refined products within Asia has led tanker rates to a three-and-a-half year high. What’s more, the rate for Jones Act tankers also hit an all-time high last week, as increasing domestic US oil output squeezes the market for US flagged vessels, Under the Jones Act only US flagged vessels are allowed to transport cargo between US domestic ports.

As a SA contributor reported “the shipping industry has been under immense pressure over the past five years due to the slowdown in the global economy and trade. There were some industry specific issues as well, such as oversupply to the operators resulting in record low shipping rates this might have been sustainable if the global economy were in a boom; however, a recessionary environment coupled with oversupply of vessels is a recipe for disaster, which is exactly what happened”.

It is also believed that along with rising day rates and increasing demand, the number of new tankers and drybulk ships entering the global fleet has begun to fall, ending several years of market oversupply.

The dry bulk industry climbed following a broad-based rally on Tuesday, encouraged by a report that showed American companies were investing in their businesses at the fastest pace since January.

On the corporate front, DryShips Inc. (NASDAQ:DRYS) continued to move higher after declaring that Ocean Rig (ORIG) successfully took delivery of its newbuilding drillship, the Ocean Rig Skyros, on Friday, December 20. The drillship is currently mobilizing to offshore Angola to launch drilling operations with Total (TOT).

Euroseas Ltd. (NASDAQ:ESEA) and FreeSeas Inc (NASDAQ:FREE) each ended 7% higher, extending gains after Maxim Group analyst Noah Parquette wrote in a note to investors that the dry bulk sector is at the beginning of a cyclical upturn.

Frontline Ltd. (NYSE:FRO) edged higher to hit new high while Box Ships Inc (NYSE:TEU) and Genco Shipping & Trading Limited (NYSE:GNK) advanced about 4%.