Feb 28 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, inched higher on Tuesday as Chinese interest in buying iron ore kept rates steady for large capesize vessels.
The overall index that reflects daily freight market prices for capesize, panamax, supramax and handysize dry bulk transport vessels rose 8 points or 1.1 percent to 738 points. The index has however lost 1000 points or 57 percent this year.
Average daily earnings of capesizes, which usually transport 150,000 tonne cargoes such as iron ore and coal, rose $59 to $5,980.
Strength in iron ore and coal chartering has helped overall dry bulk spot rates, partially offset by a decline in South American grain fixtures, Wells Fargo Securities senior analyst Michael Webber said in a note.
Steel prices have been rising gradually since last week on a rebound of demand in top consumer China ahead of construction project restarts in March, pushing up prices of the raw material iron ore.
Iron ore shipments account for around a third of seaborne volumes on the larger capesizes, and brokers said price developments remained a key factor for dry freight.
The Baltic's panamax index remained unchanged on Tuesday, with daily earnings for panamaxes, which transport 60,000 to 70,000 tonne cargoes of coal or grains, down slightly at $6,682.
Earnings of Panamaxes have dropped 49 percent this year.
"Period-wise, the (panamax) market has been extremely quiet as charterers/operators were not there to pay a huge premium over the market," ship brokers BRS said in a note.
Prospects for grain crops in major exporters Brazil and Argentina have suffered due to prolonged La Nina weather conditions that have parched grain producing areas.