Spot iron ore vessel bookings from Brazil to China jumped to a record in July as Australia suspended spot sales following detentions of Rio Tinto's top sales officials in China and as falling freight costs made longer haul trade attractive.

Chinese authorities this month detained four employees of Rio, including its top iron ore salesman in China, Australian Stern Hu, over allegations of stealing state secrets during annual iron ore negotiations.

Vessel bookings from Australia's main iron ore ports to China have collapsed to 12 so far this month from an average of 40 in the second quarter and a record 55 in March, according to fixtures data from data specialist AXSMarine.

Shipments from Brazil, the second-largest iron ore supplier to China after Australia, have surged to a record 31, suggesting China's insatiable demand for overseas ore remained intact to feed its record steel production rates.

Strong demand from China, which consumes more than half the globally traded iron ore, drove spot prices to eight-month highs, with Indian ore leading the rally, boosted by shrinking Australian supplies.

Iron ore prices of benchmark 62 percent iron content delivered in China rose to $84.4 a tonne on Tuesday, adding nearly $3 in a week, according to the Steel Index, while another compiler, Metal Bulletin, said prices of 62 percent iron content delivered in China also rose to $85.80 a tonne on Tuesday.

Indian ores with 63/63.5 percent iron content for August delivery are quoted at $91-$93 this week, up from $87-$89 last week, according to industry consultancy Mysteel.

Analysts expect spot prices would continue to stay above 2009 contract prices but upside would be also limited due to prospects of a potential reopening of China's high-cost mines and as Chinese overbuying and heavy port stocks could lead to a lull in shipments going forward.

China's iron ore imports soared 29 percent this year to a record 297.2 million tonnes and imports from Australia, the biggest supplier to China, jumped 43 percent to 122 million tonnes.

BHP Billiton said on Wednesday restocking of commodities in China may have ended, coinciding with fresh inventory building in other markets.

The Baltic Exchange's Capesize freight index .BACI, which tracks costs for vessels hauling 150,000 tonne cargoes, tumbled nearly 4 percent on Tuesday, taking one-month fall to around 30 percent and making longer-haul vessels more attractive.

It comes as port congestion problems in China eased and concerns grow over the rising number of ships set to hit the market this year, which is likely to weigh on freight rates given weak global appetite for commodities and an economic slowdown.

(Reporting by Miyoung Kim; Editing by Clarence Fernandez)

China Rio tinto Australia Fall