BEIJING (Bloomberg) — The cost of seaborne haulage of goods such as coal and iron ore can increase at least 7.8 percent by year-end, supported in part by Chinese raw-material demand, Nomura Holdings Inc. said.

The Baltic Dry Index, a measure of commodity-shipping costs, has more than quadrupled this year after collapsing a record 92 percent in 2008. Shipping rates have been supported by demand from China, where imports of iron ore, a steelmaking ingredient and the biggest dry-bulk commodity hauled at sea, rose in September to the highest for customs data on Bloomberg since 1999.

"We are bullish on the dry-bulk shipping sector," Jim Wong, a Hong Kong-based analyst with Nomura, wrote in a report. He cited materials demand for Chinese construction and infrastructure projects, rising global steel consumption and lower-than-expected supply of dry-bulk carriers. The Baltic Dry Index could "increase to at least over" 3,500 points before the end of 2009, Wong said.

China's four trillion-yuan ($586 billion) economic-stimulus plan allocates 89 percent of funds to infrastructure investment, according to a McKinsey Global Institute report in August. The global steel market has bottomed and will expand 9.2 percent next year as demand rebounds in the US, Europe and Japan, the World Steel Association said last month.

The dry-bulk fleet will swell by 11 percent this year to a carrying capacity of 489.4 million deadweight tons, according to forecasts from Drewry Shipping Consultants Ltd. in London. The estimates exclude cancelled orders, delivery delays and scrapping that can curb the projected increase.