The Baltic's capesize index .BACI fell 4.7 percent on Wednesday, with average capesize earnings falling to $37,445. Capesizes typically haul 150,000-tonne cargoes such as iron ore and coal.
"The capes have come off quite heavily today just on I think a lack of Chinese buying," Dawson said.
Brokers said freight derivatives contract selling had also weighed on the market.
"The development in the paper (freight derivatives) market supports our view that we will see rates come off recent highs as Chinese steel mills align their iron ore purchases to new production levels," Arctic Securities said.
"We also note that domestic iron ore has come down lately, potentially spurring domestic purchases rather than imports."
The Baltic's panamax index .BPNI fell 4.31 percent, with average daily earnings falling to $25,343, while the supramax index .BASI fell 0.1 percent.
Brokers said there were hopes that firmer U.S. grains export activity, helped by a Russian grain export ban, would provide support to the smaller ships later this year.
"Panamaxes have come off in the Atlantic in the past week as the grains demand has not been as strong as expected. It's been the same story with supramaxes too," said FIS's Dawson.
"A lot of ships have ballasted from the East into the Atlantic in expectation of a strong Q4, which has not materialised yet."
Analysts said freight rates would be dampened this year by the pace at which new ships are set to enter the market this year and next, despite indications of some vessel cancellations and delays.
"We expect rates to be depressed (in 2011). It is compounded by the supply issue without any doubt because a lot of ships are being built ... they obviously will have a tremendous impact," International Chamber of Shipping chairman Spyros M. Polemis told Reuters.
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