The Baltic Exchange's main sea freight index, tracking rates for ships carrying dry bulk commodities, rose on Thursday on bigger gains for the capesize index and improved activity across vessel segments.
The overall index, which factors in rates for capesize, panamax, supramax and handysize shipping vessels, climbed 15 points or 3.62 percent to 429 points. The index has gained about 47 percent since touching its lowest of 290 points on Feb. 10.
The rally, however, will have to last longer for a sustainable recovery of the shipping industry that has been facing an oversupply of vessels and a slowdown in demand for quite some time now, analysts said.
The capesize index jumped 60 points, or 28.57 percent, to 270 points.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, were up $367 to $2,518.
Shipments of iron ore, used to make steel, account for about a third of seaborne volumes on the larger capesizes, and brokers said price developments remained a key factor for dry freight.
Capesizes have benefitted from the decision of Chinese steel makers to increase steel production despite a glut, boosting iron ore trade in turn, said George Lazaridis, an analyst with Allied Shipbroking in Greece.
China's top listed steelmaker Baosteel expects output this year to rise about 20 percent, even as the country steps up efforts to slash a huge overcapacity that has boosted cheap exports and caused some producers elsewhere to shut.
The capesize index had touched an all-time low of 161 points on March 7, but has since gained 68 percent.
The panamax index was up 17 points, or about 4 percent to 501 points, supported by higher grain shipments from South America.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, rose $141 to $4,008.
Among smaller vessels, the supramax index and the handysize index rose one point each to 476 points and 272 points respectively.
(Reporting by Swati Verma and Vijaykumar Vedala; Editing by Koustav Samanta)