The Baltic Exchange's main sea freight index, tracking rates for ships carrying dry commodities, rose on Monday on strong rates for capsizes and panamaxes.

Demand for iron ore has been pushing capesize rates high since last week.

The overall index, which reflects daily freight market prices for capesize, panamax, supramax and handysize dry bulk transport vessels, rose 1.62 percent to 941 points.

The Baltic's capesize index rose 2.4 percent to 1,960 points.

Average daily earnings for capesizes, which usually transport 150,000-tonne cargoes such as iron ore and coal, were up $482 at $11,556.

"Steel mills in China remain cautious as end-user demand remains muted while the rapid price increase for iron ore seen the last week has left some mills on the sideline with expectations of lower prices," RS Platou Markets said in a note.

"Reason to be cautious is that the recent strength has been on the back of inventory building, and not a fundamental recovery."

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 panamax index rose 1.61 percent to 885 points, with average daily earnings up $118 at $7,055.

Panamaxes typically transport 60,000-70,000-tonne cargoes of coal or grain.

Increasing thermal coal fixtures and grain shipments had strengthened panamax rates, analysts said.

Average daily earnings for handysize ships were up $3 at $6,533, while those of supramax ships were down $78 at $8,032.

Source: Reuters