Arrow Research has published “scale-busting” charts detailing Chinese purchases of American corn over the past week.

Over the past week a record breaking 5.8 MMT of US corn has been purchased by China for the current marketing year adding fuel to the US corn rally.

“China has long sought to be self-reliant on corn with their tariff rate quota system penalising imports, however recently something has changed,” Arrow stated in a note to clients. “There are questions over the true size of the Chinese corn reserves and importantly the quality of that corn,” Arrow suggested with rumours circulating that Chinese authorities have unofficially relaxed their tariff rate quota system to ease domestic tightness.

The price of imported corn has been getting cheaper compared to domestic corn throughout 2020, with US corn prices now around half the Chinese domestic price. With the Brazilian soybean harvest underway, 2021 is expected to be a record year for the seaborne grains market, Arrow is predicting.

Panamax congestion is tipped to pick up this quarter – aided by the many ships already tied up in lengthy queues to ship coal in China and Indonesia. The tightness in the market is also spreading to the supramax and handysize sectors. This congestion is expected to increase on news of strikes by truckers and port workers in Brazil and Argentina kicking off this month.

Meanwhile, containerlines have been rejecting thousands of boxes of agricultural projects, determined to reposition empties swiftly back to Asia amid a record freight rate environment.

2021 is expected to be a record year for exports of soybeans from South America and Chinese imports of grains, and research suggests that port congestion could hamper bulker supply and drive up freight rates. Research by Arrow Shipbroking Group states that port congestion in Brazil is already at a high level and will get worse because bad weather will delay the soybean harvest by a “couple of weeks”. “There are already more vessels waiting in Santos [in Brazil] than at this time last year. So potentially as this queue climbs, so may rates,” Arrow said in a research note on Monday. “With the US export program in full swing, having plenty more cargoes on the books to export, the arrival of the South American harvest to ports over the coming months, albeit slightly delayed, looks set to provide a welcome thrust to the dry-bulk shipping market.”

In particular, these delays will provide further support to the spot market for supramax and handysize bulkers, the London-headquartered shipbroker said in its note. “Supras and handys have performed strongly in the past few months due to rebounding global manufacturing driving the minor bulk trade with rates now at comfortable levels,” the Arrow research team noted. “Additionally a strong iron ore trade and a recovering coal trade are supporting the smaller vessel classes.”

Seasonal port congestion in the first quarter usually affects panamax bulkers, which undertake longer-haul grain trades, as soybean exports from East Coast South America pick up. Arrow expects congestion this year to rise further, which will also impact vessel supply. “Given the already large amount of inefficiency in the market due to many coal-carrying vessels being tied up in China and Indonesia, another impulse of inefficiency could further lift fleet utilisation and potentially cause a surprise tightness in market,” the broker said. “Supramax and handysize vessels are also experiencing seasonally high congestion.”

The US Department of Agriculture (USDA) forecasts a record soybean harvest in Brazil of up to 133m tonnes this year, compared to 126m tonnes in 2020. Arrow expects a natural uptick in exports but, it said, this will be short lived. “Volumes will not sustain throughout the year like in 2020 as stockpiles are very low,” the research team noted. “In 2020 Brazil exported unseasonably large amounts as a weak Real incentivised farmers to maximise exports by selling all available soybeans, and therefore a repeat is not possible as stockpiles are now empty.” Added to this, Arrow said that there is “a real possibility” that an ongoing truck-worker strike in Brazil could become “crippling”, having gained the support of two major unions. “In 2018 there was a strike which crippled domestic supply chains and caused a large but short-lived drop in seaborne exports,” Arrow said in a research note on Monday.

2021 will be an even bigger year than 2020 for Chinese imports of grain, according to Arrow. “Domestic supply in 2020 was poor due to pests, typhoons and flooding damaging their crop,” the research team explained. “Corn from [China’s] strategic reserves has been released throughout the year to plug any gaps, however this didn’t prevent the rally in domestic prices.” The price of imported corn fell compared to China’s domestic supply during 2020 and US corn is now around half as expensive as China’s homegrown produce. But questions remain over the true quantity and quality of China’s corn reserves, Arrow noted. “Rumours have circulated that they are relaxing their tariff rate quota system to ease domestic tightness, albeit unofficially,” it said.

Demand for grain is not expected to be a problem this year and exports are already running at high levels, according to Arrow. “It’s clear China is going to play an even greater role in the global grain market this year, the record corn purchases in the past week are a sign of things to come, and indicate that imports are likely to continue to surprise to the upside,” the firm said. “In fact, strong US and Argentinian grain volumes have already pushed total grain tonnes shipped to a very high seasonal level.”

Evidence is mounting to support an escalating recovery in demand for dry bulk commodities in countries other than China, attributed to both rising consumption and restocking of raw materials. The latest HORIZON Dry Bulk Monthly report from Maritime Strategies International notes that even with China currently celebrating Chinese New Year, earnings across all dry bulk segments have been remarkably firm in a period typically characterised by seasonal weakness.

When assessed against pre-pandemic January 2020, Capesize daily spot earnings in January this year were 186% higher yoy, Panamax 104%, Handymax 91% and Handysize 71%. Notably, the last time bulker freight rates increased from December to January was 2009-2010.

One indicator of this is iron ore trade; comparing imports by world excluding China, January volumes were up 3.3% compared with a pre-COVID Jan-2020. Coal and grains trade have also played a part in the firming market: cold weather across Asia and Europe has supported coal import demand, whilst China’s grains imports continue at pace; grains trade in January was also supported by an uptick in sales from Russia prior to an export ban taking effect in February.

The Panamax freight market has been particularly strong in recent weeks, supported by temporary factors including worsening ice in the Baltic Sea. The coincidence of rising demand with temporary logistical disruptions is an important factor behind the uptick.

“Aside from firming demand, dry bulk market balances continue to be supported by reduced productivity on the back of high port waiting times while anecdotally a surge in costs to ship via containers has also driven more breakbulk cargo to be moved in dry bulk carriers, box-shaped Handysize tonnage in particular,” says MSI Senior Analyst Alex Stuart-Grumbar.

Higher dollar per tonne spot rates have also been propelled upwards by rising bunker prices, supporting margins for the most fuel-efficient modern tonnage. These dynamics have been positive for earnings in most segments, with only the Capesize benchmark faltering in early February due to poor weather conditions in export markets.

On the supply-side, January can be an indicator of what is to come for the year, as this is a preferential month for owners to take vessel deliveries. Fleet data shows that 5m dwt was delivered in January versus 1.7m dwt recycled. This compares with 6.9m dwt delivered and 1.0m dwt scrapped in January 2020, suggesting that the pace of fleet growth is slowing.

“MSI forecasts net fleet growth to slow by a third across the segments this year and strong demand growth bodes well for near-term earnings. However, the direction will be different by segment; sub-Capes will retain relatively strong levels through Q1 and Q2 before softening, whilst the Capesize market will see more sustained support in the second half of this year, assuming the emerging downside risk related to Chinese steel markets is offset by the continued recovery in raw material demand by the rest of the world,” adds Stuart-Grumbar.

Rumours have been swirling in dry-bulk shipping on the possibility of China lifting its ban on Australian coal. China imposed the ban on coal from the Land Down Under in November after relations soured over Australia barring Huawei Technologies from building its 5G network in 2018.

The move has since impacted the bulker sector by boosting rates but also causing port congestion as vessels wait for months to drop Australian coal off at Chinese ports. The ban has resulted in 66 ships with Australian coal now waiting outside Chinese ports —19 capesizes and 47 panamaxes,” Clarksons Platou Securities said on Friday. “These ships have been waiting for 130 days on average to discharge the cargo.”

Clarksons said lifting the ban amid shortages of the commodity in China could cause rates to fall by returning 7m dwt of ship capacity to the spot market.

“Talk in the market today is that China might reverse the informal ban on Australian coal,” Clarksons said. “We have not been able to verify this but would note that this could be negative for dry bulk markets overall.”

Capesize earnings were down slightly to $24,600 per day while panamax rates came in at $14,700 per day, Clarksons noted.

“If this does get lifted, this will add more vessels to the spot market while also reducing the inefficiencies we’ve seen from Australian coal going to other regions while China imports more coal from further away regions,” Jefferies analyst Randy Giveans told TradeWinds.

This time last year, many bulker owners were looking optimistically towards 2020 as a year that would see the sector mount an upswing. That is not what they got. Although the spot market was more buoyant in the second half, it was not enough to make up for the dismal opening quarter of 2020, as Covid-19 raged in China — a dry bulk demand driver — and became a global pandemic.

Data from Clarksons and the Baltic Exchange shows that average spot earnings in 2020 were the worst they have been for at least five years across all main bulker segments. On 24 December, the Baltic Exchange reported the year’s last assessment of the Baltic Dry Index — the benchmark spot indicator for the bulker business — at 1,366 points, up from 1,090 at the same time in 2019. This came as the component Baltic Capesize Index reached 2,006 points, which was the highest year-end level in seven years, noted Breakwave Advisors, the financial firm behind the Breakwave Dry Bulk Shipping ETF. However, the BDI averaged just 1,066 points for 2020, down 21% from 2020’s average and the lowest level since the indexed averaged 673 points in 2016.

Behind that slump was a broad-based decline in earnings for the sector. Clarksons data shows that capesize earnings have averaged just under $10,700 per day so far in 2020, which is a 31% plunge from the prior year. Capesize rates were “not that bad” in 2020 despite Covid-19 disruption, Breakwave Advisors founder John Kartsonas said. “Obviously, the first quarter was a tough quarter, given the pandemic started in China,” he told TradeWinds. “That is the main demand centre for dry bulk shipping, but given that China recovered fairly rapidly and was back in business by the second quarter, dry bulk shipping remained quite resilient for the year.” China’s rekindled demand for dry bulk shipping was offset, however, by other regions such as India, Europe and rest of Asia taking in less dry commodities amid the pandemic, he said.

The story was much the same for panamax spot rates in 2020, although the freight rate decline was less pronounced. The sector, which includes kamsarmaxes, saw average rates dip 20% to just over $10,400 per day, Clarksons data shows.

Supramax time-charter equivalent spot rates across 10 benchmark routes averaged at just $8,190 per day for 2020, which is a decline from nearly $9,950 according to a Clarksons calculation based on Baltic Exchange data. Rate assessments for key route baskets in the handysize sector showed similar trends.

In all sectors, the year’s average rates are at their lowest level since 2016. Futures are pointing to a modestly better 2021. The Baltic Exchange’s forward assessment for the BDI shows that predictions are for the index to average 1,189 points in 2021 — a nearly 12% boost — according to a TradeWinds analysis of the data. The first quarter of the year, at least, is expected to not be dismal. In the opening three months of 2020, the BDI hit negative numbers and averaged just 93 points. Kartsonas said 2021 is shaping up to be better for the dry bulk sector, barring unexpected events. “But the first half of the year should see more ‘normal’ rates versus the last two years that were full of extraordinary events such as the Brazil dam rapture and Covid-19,” he said. “That by itself should help averages outperform 2020.”

Brazil will once again be the sector’s main focus, Vale being the driving force behind the country’s iron-ore exports, Kartsonas said. “The company once again is guiding towards significant export growth, but it remains to be seen how much of such growth will actually materialise,” he said. But dry bulk shipping should benefit from relatively low deliveries that are expected to keep supply growth below 2% for the whole year. Meanwhile, demand from other regions outside of China should also pick up as vaccines are rolled out and their economies recover amid robust economic stimulus packages, he added. “All in all, supply and demand should tighten and that means higher rates, on average,” Kartsonas said. “With futures pricing basically a similar to 2020 year, it seems the risk-reward balance for 2021 is tilted towards being more constructive rather than cautious for sector.”

You can forget about the usual seasonal lull in bulker markets ahead of the Chinese New Year holiday this year, according to a panel of major bulker owners. The dry bulk market will this year see a more muted impact from the holiday on 12 February, Martyn Wade, chief executive of Grindrod Shipping Holdings, explained during a Capital Link webinar on Tuesday. Celebrations in China this year are being staggered over a month-long period and factories will remain open during this time, he added. China cannot afford to have 800m moving freely around the country and the related economic impact that a spike in Covid-19 infections would have, Wade said. “They will do it in a completely different manner. I think this is maybe where people have been getting it wrong, this assumption that the market will now fall off a cliff,” Wade said. “What we’re picking up is that it might ease a little bit, but this is this is going to go through, it’s going to be like no other Chinese New Year.”

Aristides Pittas, chairman and chief executive of bulker owner Eurodry, said that this effect is already being borne out in the market, which should remain stable for the next couple of months. “We are already [at] the 20th of January. The dry bulk market usually at this stage is very slow. It isn’t this year — we have the highest dry-bulk market of the last decade in January up to now,” Pittas observed. “This is an indication that … there’s a lot of demand there. “I think that there is a lot of momentum here that will gather within the next couple of months and, coupled with what Martyn said, we will see a pretty stable market during the next couple of months,” Pittas added.

The threat of higher oil prices could also help keep bulker rates firm in the short term, Star Bulk Carriers’ president Hamish Norton said during the webinar. “It’s something that people don’t pay attention to often, but charter rates in the dry-bulk market are more or less proportionally affected by increases in the oil price,” he explained. “When bunker rates go up, there is pressure on the fleet to slow down and the only thing that keeps the fleet from slowing down are high charter rates.” Consistent demand for dry-bulk shipping will leave no choice but for charter rates to rise, he added. “With vaccines being distributed and demand for jet fuel and other oil products going up, oil prices have been strong,” Norton said. “Bunker prices have been strong and getting stronger — and that’s pushing charter rates up. That’s gonna continue, we think.”

Meanwhile, bulker owners hope that trade tensions between China and Australia will result in more inefficient trade routes and more tonne-mile demand for dry-bulk shipping. China has already banned imports of coal from Australia but is still accepting its iron ore. But if China bans Aussie ore or diversifies its international suppliers, shipowners hope that the country will become more dependent on imports from further afield, such as from Brazil and Africa, the webinar heard. Meanwhile, the price of Australian coal has halved, making it amongst the world’s cheapest, and the commodity is making its way around the world on longer-haul routes. “Australia now is obviously importing a lot into India, Bangladesh and places, but also to Europe, so we’ve got a double whammy on this. … Long may it last. I think it’s very, very positive,” Wade said.

Weather is also playing its part, he continued. “With La Nina, you’ve got northern Europe, northern China, in particular, and northern northern Asia having incredibly cold winter,” Wade said. “A lot of the countries — China, Korea, Japan — are short on coal; LNG prices are through the roof, and with Australia blocking China, they’re getting their coal from elsewhere — Columbia, South Africa, even ultramaxes out of the Black Sea.”

Owners pinning hopes on a dry bulk rate recovery in 2021 will have to adjust their outlook based not just on China’s continued strength of demand, but also on the scale of recovery in the rest of the world.

For seaborne iron ore trade, soaring prices indicate not just firm demand, but also actual and anticipated constraints on supply, according to brokerage Simpson Spence Young. “For the main arterial capesize iron ore trades, the ability of mining companies, especially those in Brazil, to raise output will be crucial in shaping this year’s trade growth,” it says in its 2021 outlook.

Coal, on the other hand, has suffered the greatest reverse of the main dry bulk cargoes in 2020, on course for an annual decline of more than 100m tonnes. “Prospects for recovery are complicated by not just the pace of recovering demand, but also by the structural challenges facing producers from worldwide efforts to reduce carbon emissions.”

Again, China’s coal import policies are likely to have far-reaching effects. At present, the apparent aversion towards Australian coal and rising domestic steam coal prices has benefited coal suppliers in Indonesia, and US coking coal exporters have reported more interest from China.

Fortunately, grain trades in contrast to coal, are maintaining their upward trajectory, SSY noted.

Another key question this year for bulker owners is the extent to which fleet inefficiencies will continue to distort vessel supply-demand balances.

Since the beginning of 2020, the capacity of the dry bulk fleet expanded by a net 3.9% to mid-December, with demolition activity low by historical standards, but fleet carrying capacity during this time has faced numerous constraints from coronavirus-related delays resulting from crew change complications and quarantining in addition to chronic berthing delays in China’s terminals since June.

“The dry bulk market of 2020 witnessed many twists and turns for both vessel demand and supply, and this year will no doubt bring more,” said Derek Langston, head of SSY consultancy and research.

The total cost of the coronavirus pandemic in global GDP terms is about $6 trillion, according to the Centre for Economics and Business Research World Economic League Table 2021. Almost every country in the world has been negatively affected by the coronavirus backdrop in terms of GDP growth, with the exception of China, which was severely hit in the opening months of the past year. It rapidly recovered.

The CEBR notes that one of the major effects of the measures imposed last year has also been to redistribute economic momentum between countries, with Asia performing better than Europe and the United States, as reported by Lloyd’s List. It predicts that this redesign of the global economy will mean that China will overtake the US as the world’s leading economy by 2028, which is five years earlier than its previous forecast.

The rapid adoption of networking technology to facilitate home working helped to limit the impact of the coronavirus in many sectors of western economies in the past year, and for shipping also accelerated the path towards digitalisation. But strong production and a fast rollout of new vaccines to combat the spread of the virus should see major economies bounce back to pre-pandemic levels in 2021. Even then, China is expected to be the leader in terms of GDP growth in the coming 12 months, with in excess of 8% predicted by the CEBR.

This is expected to be good news for the dry bulk sector, which only declined by 1.9% in seaborne trade volumes in 2020. This was primarily due to China’s imports of raw materials for vast infrastructure projects, much of it being iron ore for steel production. Global steel production grew by 6.6% in November 2020.

Container volumes decreased in 2020 due to the impact of the lockdowns in China at the start of the year and the subsequent slowdown in consumer demand from western markets. That changed dramatically in the second half of the year, however, as the demand bounce-back exceeded expectations and retailers scrambled to replenish stocks. Asia-Europe rates are at record highs as new lockdowns and a shortage of equipment increase demand for container slots, while congestion at major ports grows.

China’s increasingly important role in the tanker market is also evident in figures released by ship brokerage Poten & Partners this week. It said China’s state-owned traders and refiners accounted for more than one fifth of dirty spot cargoes shipped on very large crude carriers in 2020. The backdrop has not impacted Chinese imports of energy products in the same way as it has in Europe, where new lockdowns will extend the period of muted demand. Total seaborne trade saw negative growth in 2020 and is estimated to have fallen by 3% versus 2019. The rebound in 2021 is forecast to be plus 5% and in 2022-2024 the forecast stands at a yearly average growth of 3%. While China’s economic growth is tracking ahead of schedule, the unrest seen in the United States in the past week when protesters stormed the Capitol highlights the extreme division that has crept into politics there and could hamper efforts to tackle the coronavirus pandemic.

The Eurasia Group think tank ranked political division in the United States as number one in its Top Risks of 2021 list, ahead of Long Covid, energy transition and US-China trade tensions. It points out that while Joe Biden’s victory was decisive in terms of both the electoral college system and popular vote, outgoing president Donald Trump increased the number of votes he received to 74m, up by 11m compared with 2016, showing that his base extends well beyond his most vocal supporters. With President Trump’s refusal to accept the outcome of the election, coupled with Republican gains in the House of Representatives and success in creating a decisively conservative Supreme Court, Eurasia argued that Mr Biden will start with the weakest political mandate since Jimmy Carter in 1976. The report was released on January 4, prior to the Capitol unrest and Democrats effectively winning control of the Senate and therefore full control of Congress alongside the majority they hold in the House, but much will depend on the pandemic response and economic recovery. Should the vaccine rollout proceed as hoped, with the pandemic subsiding and a strong economic recovery following, Mr Biden will almost certainly gain political capital and may be able to bridge the political divide. However, if the response fails and the economy stutters, the opposition to his presidency will grow.

Another issue that found some resolution at the end of 2020, although will undoubtedly be revisited and reassessed as the year goes on, was Brexit. A deal to cater for the post Brexit partnership was agreed between the European Union and the UK in late December and provisionally implemented on January 1. In many aspects, the deal is what the market thought an agreement would look like. In broad terms, it ensures continued tariff-free and quota-free trade in goods after January 1, although there is no word on services, which make up 80% of the UK economy and are the strong suit of London as a maritime centre. The deal should be not be seen as an end in itself but as the beginning of a drive to test new policies that could work to the benefit of both sides in promoting prosperity, while ensuring that the gains from prosperity are fairly shared out. Given that the EU economy is six times as large as the UK, the latter is probably the one gaining most on a deal. For shipping, it means that vessels sailing between Britain and the EU will continue to enjoy unrestricted access and the same treatment in each other’s ports after Brexit. The 1,246-page agreement also bans either side from erecting non-tariff barriers to shipping in future. It is too early to assess all the potential effects of the deal yet, but in short — it is most likely better for trade and shipping to have the deal, than not.

Perhaps of more consequence on a global level is that the EU also signed an agreement with China late in the past month. The EU-China investment, which has been some seven years in the making, removes barriers on foreign investments in China for some European industries as well as tackling forced technology transfer, non-transparent subsidies and state-owned enterprises. It also commits China to “make continued and sustained efforts” to ratify international conventions on banning forced labour. While it is a big win for the EU, particularly in light of the growing economic influence of China as outlined above, some analysts see it as a challenge to the incoming Biden administration, which wants to coordinate with Europe on how to handle China politically in future. EU officials have rejected criticism that they did not consult with Washington over the deal, arguing that the US secured its own trade and investment deal with China under President Trump, and that the EU is simply trying to ensure it has similar market access conditions, which would allow Brussels and Washington to then co-ordinate their policies towards China from a similar starting point.

Capesize bulker spot rates leapt on Friday amid strong demand and soaring prices for dry commodities, as brokers forecast better times for dry bulk shipping. The weighted time-charter equivalent average for the segment bounded 20% to $21,131 per day, according to the Baltic Exchange. The Baltic Dry Index also gained to 2,548 points.

“We therefore believe the commodity price rally could signal improved times for dry bulk shipping,” Clarksons Platou Securities wrote in its daily report on the sector. “Most commodities are now surging.”

The investment banking arm of shipbroker Clarksons also attributed the buoyant capesize rates to robust iron-ore shipping demand in the Pacific basin that is also lifting the paper market. Capesize freight-forward agreement (FFA) rates for January stepped up almost 10% on Friday to $19,350 per day, while first quarter FFAs improved more than 10% to $15,900 per day. “It’s not that many months ago when first-quarter expectations were as low as $8,000 per day,” Clarksons Platou said. “With the first quarter traditionally being the weakest quarter, full-year consensus estimates are now likely to be revised significantly higher.”

Rates are also getting a boost from rising Chinese coal prices and power shortages, tight vessel supply and uncertainty over China’s plans to use less coal for 2030 and 2060 carbon-reduction goals, Clarksons Platou noted. Rates for capesize forward freight agreement (FFA) for all of next year are trading at $16,400 per day.

Capesize rates are likely to benefit further from China’s recent decision to reject Australian coal by prompting the huge country to get the fossil fuel from farther-away US and Canada, Clarksons Platou added.

Iron-ore prices have hit nearly a nine-year high of $170 per tonne, while coal and grain prices are also on a healthy upward trend. “The correlation between commodity prices and dry bulk trade growth is very high, at least on annual data, meaning that if commodities prices remain high, there will be a clear production and exports response which drive trade higher,” Clarksons said.

“With regards to grain, despite some recent supply fears, a seasonal upswing in exports from South America in March is bound to support the market as well, in our view.”

Throughout October and November – a period of time when container shipping was smashing records while crude tankers suffered – Splash readers were invited to vote for which shipping sectors would perform best and worst in 2021. With more than 1,000 votes cast, our readers have, by and large, stuck with the status quo, believing current market dynamics will play out over the coming 12 months with containers remaining the best performers and crude tankers’ tough times continuing.

Armed with our readers’ thoughts we approached many of the world’s leading shipping analysts last month to put them on the spot, asking them for their best and worst sector picks for next year. What is clear from our analyst survey is that the shipping market fundamentals in general are in a far more hopeful position today than for the majority of this year – thanks to vaccines being rolled out around the world and the stunningly low global orderbook.

“I generally think 2021 could be a year of great opportunity for shipping investors,” argued Joakim Hannisdahl, the head of research at Oslo-based Cleaves Securities. “Looking ahead to 2021, the shipping industry has a much better view than looking in the rearview mirror at 2020. The supply picture is getting better and better, with most orderbook-to-fleet ratios at 20-year lows while the average fleet ages continue to creep higher,” said Randy Giveans, senior vice president at Jefferies. On the demand side, he says it is hard to think of a scenario where commodity demand in 2021 is worse than this past year, so Jefferies is predicting demand growth easily outpacing supply growth.

Jonathan Chappell, a shipping analyst with Evercore ISI, coined a football cliché in outlining how he sees 2021 panning out, suggesting it will be a game of two halves with tankers especially told to brace for a very tough first two quarters before the world can enjoy “some semblance of post-vaccine rollout normalcy”. J Mintzmyer, lead researcher at Value Investor’s Edge, said he is most interested in containership stocks in 2021, primarily because the current rate surge is bringing on one- to two-year or longer charter deals and counterparty risk has greatly abated, yet the stocks still haven’t surged yet. Supporting Mintzmyer’s box pitch was Dr Adam Kent, the managing director at UK-based Maritime Strategies International (MSI). “Perhaps the most spectacular and at first glance counterintuitive, given the headline macroeconomic backdrop, has been the levels to which the containership charter market has been able to reach in Q4 2020,” Kent said, going on to predict that the sector will continue to do well into 2021 at a time when supply chains and liner company networks are stretched to their limits, buoyed by strong demand and container box repositioning.

Many other respected names in shipping research are adamant that after many flat years 2021 is finally dry bulk’s moment in the sun. “Dry bulk is my top pick at the moment given the lowest orderbook versus fleet on record, which leads to net fleet supply growth of only 1-2% per annum,” said Hannisdahl from Cleaves. With no signs of newbuild ordering picking up, this low fleet growth could continue well into the middle of this decade, he argued, adding that Cleaves is expecting a strong rebound in demand in 2021, with Chinese consumption of rising iron ore exports from Brazil and Australia a major driver.

Burak Cetinok, head of research at Arrow, also believes the dry bulk sector will outperform tankers and containers in 2021. “China shows continued strength and now the rest of the world is catching up,” Cetinok said.