Unlike the Capesizes, which seem to have lost the majority of their 2021 gains in the final two months of the year, Panamax freights end the year still considerably higher than where they started it. The Panamax index closes the year at around 2,500 versus the sub-1,500 level at which it began 12 months prior. Indeed, it is still a notable decline from the over 4,000 level reached in October (the highest in several years), but it is nonetheless the sign of a strong fundamental market and one that is already recovering in the final weeks of the year thanks to renewed demand for Atlantic grain. Pacific redelivery demand for Atlantic grain was, in fact, what got the fire started for Panamaxes early in the year as the reduced import volumes from 2020 left a serious gap in food stocks across the eastern basin. Renewed import demand in the first half of the year saw China’s soybean imports jump by 16.8% YoY in the year through April.

The months of March and April saw serious congestion emerge around South American ports, especially around Brazil, with the number of Panamax vessels necessary suddenly spiralling beyond any charterer’s wildest predictions. All this played into the hands of owners who were happy to demand ever-higher rates for the privilege of getting tonnage secured on a timely basis and on the schedule demanded by urgent chartering plans. Summer was even better as Q2 time charter rates briefly doubled from their Q1 levels. Corrections ensued later in the year, but sentiment stayed strong.

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