August 30, 2008

Demand to keep dry bulk rates firm – Star Bulk

Reuters reported that port congestion and strong demand from China and India should help dry bulk shipping rates stay strong throughout 2008.

Mr Akis Tsirigakis a top executive of dry bulk shipper Star Bulk Carriers Corp told Reuters in a telephone interview that “I feel we are going to see a relatively strong 2008 overall, but with high volatility at times during the year. The demand is still coming from China predominantly, but India is becoming a more important player.”

He added that a US economic slowdown would affect demand from China and India, but said internal demand for commodities from those two developing markets should remain robust.

Mr Tsirigakis said that 'We are talking about the industrialization of 2.5 billion people. I don't think there's any going back.”

The Baltic Exchange's chief sea freight index, which gauges the strength of major trade routes for bulk commodities including iron ore and grains, rose nearly three fold from the start of 2006 on the back of Chinese commodity imports. The index is currently down more than 20% since reaching a peak in October, but has regained ground recently.

Greece based Star Bulk has a fleet of nine vessels, with another due for delivery in April and Mr Tsirigakis said the company is looking actively at acquiring more ships. We have plenty of possibilities to lever up and buy a few more vessels.