The Baltic Dry Index (BDI) has fallen to its lowest point in more than 2.5 years as China suspends manufacturing ahead of the Chinese New Year and Brazil contends with heavy rainfall that has hurt iron ore exports.

The BDI declined 8.4% on Thursday to 801 points, marking its lowest level since the dry-bulk market barometer registered 839 points on 11 June 2020.

“Early heavy rainfall has hampered iron ore shipments from Brazil, resulting in a 15-day drop in exports compared to last year, when the significant rainfall occurred in February,” Clarksons said in a report on Thursday.

“With China shutting down for the Lunar New Year holiday beginning tomorrow, activity is expected to be minimal until January 30.”

Capesize bulkers, which mostly carry iron ore from Brazil and Australia to China for steelmaking, saw the steepest rate decline of all bulker sizes on Thursday.

The Capesize 5TC, a spot-rate average weighed across five key routes, plummeted 19.4% to $7,404 per day on Thursday, while the average spot rate for the benchmark iron ore voyage from Brazil to China cascaded 18.4% to $5,600 per day.

“Brokers reported a distinctly negative sentiment, with rates on the slide before the holidays and little support in the near term,” Baltic Exchange analysts said on Thursday.

But Australian iron-ore majors Rio Tinto and BHP expect China’s measures to boost its property sector to cause strong demand for the steelmaking ingredient after the new year come to an end on 30 January, Reuters reported.

BHP reaffirmed forecast for its 2023 fiscal year, which ends in July, for Western Australia iron ore output at between 278m tonnes and 290m tonnes.

Average spot rates for the smaller bulkers also played a smaller part in taking the BDI down to just above 800 points by falling slightly on Thursday due to low coal demand and grain seasonality.

The Panamax 5TC lost $31 per day on Thursday to land at $9,641 per day as the Supramax 10TC shed $24 per day to come in at $7,198 per day.

The Handysize TC declined by $151 per day on Thursday to register $8,091 per day.