FT Alphaville is reporting that the Baltic Dry index (BDI), widely considered a benchmark index for global trade in dry bulk commodities such as iron ore, coal and iron, jumped almost 15% to 1,316 points on Wednesday. the biggest daily increase in almost 25 years, on signs of a recovery in the raw materials trade.

The signs of life are in Capsizes, the largest vessels, as Chinese steel makers buy more iron ore from Australia and Brazil. The index of course is still nowhere near last year's all-time high 11,793 points, but has already rebounded 98.5% from its December 22-year low of 663 points.

Japan's Kawasaki KK (9107.T) upticked on the news, while The Australian is reporting that iron ore majors are confident they have spotted a bottom in prices. "Fortescue executive director Graeme Rowley reflected incipient confidence within Fortescue's major iron ore cousins, Rio Tinto and BHP Billiton, that the spot market is again on the move". "The bottom of this slowdown has been reached and we are starting to see a comeback in prices," says Mr. Rowley. This versus the wide-spread conjecture that iron ore prices could fall by as much as 40 per cent this year.

The reality check is that Fortescue (Fortescue FPO, ASX: FMG.AX)is still cash-flow negative, having burned another $484 million over the half as it continued to invest against its ambition to mine and deliver 45 million tonnes of ore by as early as the end of calendar 2009. Companhia Vale ADS ((NYQ: RIO) bounced just over 5% yesterday in NY.