What happened Shares of dry bulk shipping company Diana Shipping (NYSE: DSX) surged more than 10% in early trading Tuesday before giving back some of their gains and closing the session up 5.9%. Good news in the dry bulk industry appears to be the cause. Image source: Getty Images. So what As Hellenic Shipping News reported yesterday, the dry bulk market has been going "from strength to strength" lately, with freight rates across the Atlantic in particular surging since mid-August. And in a follow-up piece this morning, Hellenic Shipping News noted that rates on Supramax and Handysize transport ships are "edging closer [to rates last seen in] the 2008 record year." Furthermore, in a separate article, global shipping news outlet TradeWinds predicted over the weekend that the dry bulk market "should remain strong" throughout the balance of 2021 at least. Now what That being said, investors shouldn't take these predictions as gospel. Although it's true that rates for dry bulk shipping have been on a tear -- the Baltic Exchange Dry Index is in fact up three times since the beginning of the year -- the index has actually retreated from its high of 4,235 hit on Aug. 27, falling 10% through yesterday's close. Investors should bear in mind that in cyclical industries like shipping, high prices tend to inspire shippers to add capacity to capitalize on the windfall profits, and this then acts to lower those profits as supply and demand come back into balance. Diana Shipping's stock price may be rising in the face of this downturn for now, but it won't be able to defy gravity forever. If dry bulk shipping prices don't resume rising soon, you can expect Diana's share price to begin falling sooner rather than later. 10 stocks we like better than Diana ShippingWhen our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* They just revealed what they believe are the ten best stocks for investors to buy right now... and Diana Shipping wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of August 9, 2021 Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.Source