There are few adjectives left to describe the mind-boggling boom in the big-bulk carrier market which, some brokers believe, promises to earn untold fortunes for owners in the sector for may months to come. This week has seen the bulk market indices breaking all records. Latest figures show the Baltic Dry Index soaring from 2,796 in the last week of September to 3,829; the Capesize smashing through 5,000 to 5,467; the Panamax index jetting upwards to 4,079; and the Handymax index piercing the 17,500 level.

Certainly, prevailing rates for Capesize and Panamax units are unbelievable: according to Clarkson Research, early October saw spot earnings for 165,000 dwt vessels on the route from Dampier to Japan exceeding $67,500 a day. At this level, you could pay for a new Capesize in less than two years! Of course, this rate is quite exceptional and is unlikely to last for long. It compares with an average of under $33,000 a day on that route for the year to date, and an average of less than $12,800 for the whole of 2002. However, average earnings for a modern Capesize still hit $52,000 last week, compared with an average last year of just $13,380, according to Clarkson figures.

The story is the same in the Panamax market. Brokers are reporting round trips in the Pacific at more than $35,000 a day. Clarkson¡¯s latest figures indicate average Panamax earnings of just over $24,500, compared with $14,650 in the year to date and $7,284 for the whole of 2002. Meanwhile, the market for smaller vessels is significantly stronger as soaring rates have an inevitable knock-on effect.

The question is: how long will it last? Well, analysts are rarely unanimous, but on this occasion they appear to be talking the same message. The fact is that Chinese demand, particularly for iron ore and coal, appears insatiable. That is fuelling the market at the top end whilst other major bulk trades are buoyant too, particularly in the Pacific. Ships are busy, and there is almost no spare capacity by way of supply. Small changes in demand, therefore, have a completely disproportionate effect on rates and, for once, in just the direction that owners want.

Most importantly, however, the world¡¯s shipyards are pretty much full. A recent analysis concluded that they are currently operating at 97% of capacity. There is a vast orderbook and little scope to squeeze in extra contracts between now and 2007. Newbuilding brokers estimate that there is perhaps scope to build another ten Capesize units in Japan and China for 2006 delivery. But this is marginal and there is little scope to add much tonnage in the smaller sizes either.

Meanwhile, Clarkson reports that new ship contracts placed so far this year now total 76.5 mil. dwt and could be on the way to breaking the record contracting year of 1973. Although 129 mil. dwt was ordered then, a large number of contracts were cancelled. With one quarter of the year left to go, total contracts could well break through the 100 mil. dwt mark. As Clarkson points out, the boom is not confined to one sector-tankers may have had a wobbly week, but are fundamentally sound, and the container and bulk markets are breaking all records.

The cost of new ships looks pretty attractive alongside secondhand prices, ramped up as owners struggle to get their hands on modern tonnage.

Meanwhile, money is cheap and there¡¯s plenty of equity around. To cap it all, Clarkson says regulators are now targeting bulkers as well as tankers.