The Baltic Exchange's main sea freight index fell to a more than four-month low on Tuesday as weak demand from China dragged down vessel rates across all segments.
The Baltic dry index, which tracks rates for capesize, panamax and supramax vessels, was down 21 points, or 1.6%, at 1,263, its lowest since mid-June.
The lack of demand from China has pulled out freight rates from a period of little movement seen in the third quarter and sent prices to multi-month lows, said Peter Sand, the chief shipping analyst at BIMCO.
"It all hinges on demand from China," he said, referring to the demand outlook for vessels.
The capesize index fell 33 points, or 1.7%, to 1,862.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, fell $270 to $15,445.
Iron ore retreated after a five-day rally as port inventories of the steelmaking ingredient climbed to their highest since February.
The panamax index was down 25 points, or 2%, at 1,250, hitting a three-month low.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, fell $221 to $11,252.
The supramax index eased 11 points to 932.
(Reporting by Asha Sistla; Editing by Ramakrishnan M., Aditya Soni)