Baltic index rises further, Chinese demand strong

* Coal and iron ore demand firmer

* Growing fleet supply likely to temper gains

By Jonathan Saul

LONDON, Nov 11 (Reuters) - The Baltic Exchange's main sea freight index .BADI, which tracks rates to ship dry commodities, stayed at over a four-month high on Wednesday as firm Chinese demand for raw materials boosted sentiment.

The index, which gauges the cost of shipping resources including iron ore, cement, grain, coal and fertiliser, rose 3.68 percent or 133 points to 3,748 points and was at its highest since June 30 in a tenth straight session of gains. In recent months Chinese demand for iron ore -- the primary material in the manufacture of steel -- has dominated freight market activity while adding to swings on the main index.

"Pacific capesize freight rates are continuing to firm on the back of iron ore demand into China, with strong support in the last 10 days lifting Pacific spot rates for Australia-China," John Banaszkiewicz, managing director of freight derivatives broker FIS, said.

"On the back of that, interest in fixing for short periods has grown, suggesting (ship) owners have confidence in the nearby market."

Iron ore appetite has picked up in Europe, with seasonal demand for coal, especially in France and Germany, helping to bolster interest for the larger capesize ships and also smaller panamax vessels, brokers and analysts said.