He said, 'For the remainder of this year we are going to experience a strong market. In the short term, we will see a healthy correction after huge recent gains, but demand will keep rates high. The long-term charter contracts customers are signing on ships that are not due to hit the water until 2010 lead me to believe rates will also remain strong beyond the end of 2007.'

Demand for raw materials is particularly high in China and India and congestion in ports in Brazil and Australia are the main drivers for freight costs. Charter rates for seaborne dry commodities trade have broken record after record this year on strong demand for raw materials, buoyant global economic growth and port congestion at key export centres. The market has remained strong despite recent turmoil in financial markets and concern over slowing US economic growth. High demand for commodities such as iron ore, coal, steel and grain has translated into rising prices for dry bulk vessels.

'There has been no change in dry bulk market fundamentals, with rates and vessel values continuing to sky-rocket into record territory,' Dahlman Rose analyst Omar Nokta wrote in a research note on Monday. “Despite the fact that dry bulk stocks have proven to be susceptible to broad market weakness ... we continue to view investment in dry bulk companies very favourably, with fundamentals too strong to ignore.'

Source: www.hellenicshippingnews.com