The Baltic Exchange's main sea freight index slipped to its lowest in nearly three weeks on Wednesday, dragged by a drop in demand for the larger capesize vessel segment.
The Baltic dry index, tracking rates for capesize, panamax and supramax vessels ferrying dry bulk commodities, was down for a fourth straight session, and dipped by 119 points, or 7.2%, to 1,540, its lowest since Jan. 7.
The capesize index which extended its losing streak to five sessions, fell 352 points, or 14.1%, to 2,145, a near three-week low.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, dropped $2,919 to $17,790.
"This week, rates reversed to a downward trend with softening physical demand in both the Atlantic and the Pacific, while China's congestion levels have been easing," ship broker Intermodal said about the capesize segment in a weekly research note.
China's iron ore futures dipped on Wednesday, weighed down by concerns over a likely reduction in output by steel mills hit by losses due to high production costs and weak demand.
"Market participants expect a softening of restocking activities ahead of the Chinese New Year," Intermodal said.
The panamax index was down 15 points, or about 1%, at 1,645.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 tonnes to 70,000 tonnes, slid $136 to $14,807.
The supramax index rose 5 points to 1,163, a peak since late-October 2019.
(Reporting by Bharat Govind Gautam; Editing by Ramakrishnan M.)