Weakening bulker markets have pushed the Baltic Dry Index (BDI) to its lowest level since 11 June.

The index, which indicates the overall strength of bulk carrier markets, fell by 295 points to 2,892 on Wednesday, less than a month after hitting a 13-year peak of 5,650 points.

Gloom in the capesize spot market, which accounts for 40% of the BDI's calculation, has weighed heavily on the index.

The 5TC basket assessment of average capesize spot rates was assessed at $27,162 per day on Wednesday, $3,825 lower than the previous day. The assessment has not been this low since 10 June.

Freight rates for capesizes have been dragged down over the past month by a barrage of bad news on Chinese commodity demand.

An extraordinary sell-off in the forward freight agreements (FFAs) has added to the negative sentiment.

Fixtures on major iron ore routes to China have been steady, but concluded at rates not seen since July.

"Pain is particularly felt on the Brazil/China fronthaul run, where adjusted iron ore demand prospects and lack of spot activity have knocked the 100-day China-Brazil-China round voyage value down by another 27% to $22,000 [per day]," Fearnleys Research said in its weekly market report on Wednesday.

"Inter-Pacific spot demand is healthy and stable in comparison, but Pacific traders have nevertheless seen it coming off close to 30% over the last five trading days to stand at $23,000 [per day]."

There is "considerable" interest in period deals, but little has been concluded because of the constant slide in spot and paper values, the report said.

Panamaxes

Weakening demand has also hit panamax and supramax spot rates, which each contribute 30% to the calculation of the BDI.

Tonnage lists for panamaxes are growing in the East and West.

The downturn is most noticeable in the Pacific, where round-trips are being concluded at day rates of about $25,000, which is up to $13,000 lower than last week, Fearnleys said.

Average panamax rates have plunged over the past week, after peaking at $38,952 per day last Monday.

The panamax 5TC, the weighted average of spot rates across five key routes (based on an 82,000-dwt vessel), was assessed on Wednesday at $30,191 per day, down by $2,606 since the previous day.

"All this is caused by lack of demand, but we do believe we will find a logical bottom very soon," Fearnleys said.

"The period market has taken a massive beating this week, also with the effect from the downward curve in FFAs."

Supramaxes

The supramax spot market is in a similar predicament, with vessel supply far outstripping demand from charterers.

The 10TC basket assessment of average supramax spot rates fell by a further $2,109 on Wednesday to $30,005 per day.

"Demand is disappearing, congestion easing off, coal shipments from Indo[nesia] reducing dramatically it's all added pressure on spot trading as well as period market vanished away," Fearnleys said in its report.

"Not much more to add except that we perhaps see the overreaction on the market due to the latest FFA development rather the fundamental grounds."