Forward freight agreement deals done in the past 24 hours point towards a very bullish outlook for the dry bulk sector throughout 2021. “Yesterday proved another day apt to change contact lenses,” quipped analysts from Lorentzen & Stemoco in a daily markets report today. “The figures in the FFA market are hard to believe at first glance, but they are true,” the report stated.

Capesize FFA prices for March moved up to $18,025 a day, but much more so for April to $22,809 a day as talks of firming C5 coincides with rumours of a newcastlemex for ultimo-April loading at $22,000 a day. May also moved up to $23,200 a day and June to $23,309 a day with Q3 at $24,209 a day and Q4 at $22,050 a day. Kamsarmax FFA prices rocketed yesterday, with March surging to $22,455 a day and April up by $2,432 a day to $26,414 a day and May up by $2,219 a day to $25,355 a day with June at $23,417 a day. Supramax FFA prices were also star performers with huge upswings leaving March at $22,450 a day, April at $23,486 a day, May at $21,743 a day and June at $19,364 a day, according to the Baltic Exchange.

The frenzied action yesterday was described by one London-based markets watcher as being akin to rabbits in the headlights. “The FFA market is taking 2021 in its stride, moving from strength to strength. After the record volumes we saw a few weeks ago, beating the 2008 record, the start of this week has been full of positive sentiment and good volume,” a spokesperson for the UK’s Freight Investor Services told Splash today, going on to describe the contango developing on the front months of the cape and panamax markets, suggesting that the market thinks that this squeeze on tonnage could continue for some time.

“This goes hand in hand with the bullishness we are seeing in commodities, with the prices of iron ore, coal, steel products, soybeans, corn, etc the highest they have been in years,” commented Ralph Leszczynski, global head of research at Banchero Costa. Iron ore, at over $160 per tonne, is double what it was 12 months ago, for example. “There is clearly bullishness in the air, as economies in Asia in particular are recovering and doing better than expected, and we are hopefully getting towards the end of the Covid crisis with the vaccine rollouts,” Leszczynski said.

A report from Breakwave Advisors this week predicted that demand growth for dry bulk shipping this year will total almost three times the growth in net new supply, and although utilisation is still well below the record high levels of the 2000s, directionally, utilisation is heading to “new multi-year highs” that have the potential to push shipping rates much higher.