The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, fell on Tuesday for a sixth day due to weakness in dry bulk shipments.
The overall index, which reflects the daily freight market prices for capesize, panamax, supramax and handysize dry bulk transport vessels, fell 26 points or 2.57 percent to 986 points, lows not seen since mid-April.
"Activity was muted at the start of the week with holidays across continents," RS Platou Markets analyst Frode Morkedal said.
The Baltic's capesize index lost 1.92 percent to 1,377 points.
Rates for capesizes, which typically transport 150,000 tonne cargoes such as iron ore and coal, were down $375 at $5,736.
"With Chinese iron ore buyers in a wait and watch mode, the outlook near term remains weak," Morkedal said.
Some analysts, however, expect the current capesizes rates are likely see a bottom soon with steel output in top producer China is likely to remain near its record highs in June.
Shipments of iron ore, a raw material for steel, account for around a third of sea-borne volumes on the larger capesizes.
China's daily crude steel output hit a record 2.045 million tonnes in early May, the China Iron and Steel Association estimated, and an official at the industry group said on Tuesday the run rate was likely to stay around 2 million tonnes in June.
The Baltic's panamax index fell 3.91 percent, with average daily earnings down $325 at $8,033.
Average daily earnings for handysize and supramax ships were up at $9,588 and $11,396, respectively.
Growing ship supply, which is outpacing commodity demand, is set to cap dry bulk freight rate gains in the coming months, with economic uncertainty and a slowdown in China adding to headwinds.
The main index, which factors in the average daily earnings of capesize, panamax, supramax and handysize dry bulk transport vessels, has fallen about 43 percent this year.
Analysts expect, however, the dry bulk segment to show some improvement with the Chinese government making efforts to fast track approvals for infrastructure investment to combat a slowdown in the economy.
"We believe the dry bulk shipping market could begin to improve if/when Chinese authorities follow through on the recent pledges of stimulating economic growth through accelerated infrastructure projects," Jefferies analyst Douglas Mavrinac said in a note.
Analysts said sliding iron ore prices in top consumer China were likely to spur some buying interest, which in turn may boost the demand for tonnage.
"Iron ore prices in China have come down to $130 per tonne, but seem to find support around this level - which could spur some more shipping activity," Arctic Securities analyst Erik Nikolai Stavseth said.