The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, fell for a fourth day on Friday as growing vessel availability outweighed demand for raw materials.
The index fell 1.06 percent or 14 points to 1,306 points. Prior to this week's falls, it had risen for seven straight sessions.
"Commodity supply is improving and global demand remains robust. Unfortunately for freight rates, however, the market continues to be bogged down by a large amount of available vessel and new-building deliveries," said Jeffrey Landsberg, managing director of dry bulk consultancy Commodore Research.
"Despite the very encouraging cargo outlook, most freight rates are likely to stay under pressure."
Brokers said the selling of freight derivatives contracts this week had added to the softer tone. There were also expectations that the onset of India's monsoon in June would reduce iron ore exports as the country's rivers rise, making it harder to transport goods.
"The cargo outlook for the next few weeks looks good. Major Chinese steel mills have not yet begun receiving reduced electricity allocations, so iron ore demand should remain high,"
Landsberg said.
"India will likely ramp up its thermal coal imports before monsoon season."
The Baltic's panamax index .BPNI fell 2.82 percent, with average daily earnings dropping for a third day to $13,797. Panamax vessels usually transport 60,000-70,000 tonne cargoes of coal or grains.
"We are seeing greater number of (panamax) vessels on offer, perhaps reflecting the developing pessimism in the near term," said broker Braemar Seascope. "There is little to encourage the market not to continue to drift off for the foreseeable future."
OUTLOOK
Brokers said the winding down of South America's grain export season would weigh on panamax availability.
The outlook for dry bulk rates has been grim, because rising ship supply has outpaced demand to ship commodities.
Floods and cyclones in Australia in February had hit coal production, and some producers are still struggling to return to normal operations, hurting capesize activity.
Weather-related and logistics problems at Brazilian ports have also disrupted iron ore shipments from there.
Operators were also watching for further signs that China's economy was slowing, given how dependent the dry freight market is on Chinese imports, especially of coal and iron ore.
Oil and metals extended a recovery on Friday as U.S. and European economic data dampened worries about growth and monetary tightening, luring investors back into commodities after a bloody rout.
The Baltic's capesize index .BACI fell 0.27 percent, with average daily earnings inching lower to $6,002. Capesizes typically haul 150,000-tonne cargoes such as iron ore and coal.
The index has more than halved in the past six months to near levels last seen during the financial crisis in 2008.