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Changes to Baltic Exchange dry bulk indices

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The Baltic Exchange

The Baltic Exchange will be implementing previously announced changes to its Supramax Index; launching dual reporting of a new Panamax Index on a trial basis and is in the final consultation process of a new Handysize Vessel dual reporting period for the Handysize Index. These actions meet the standards set out by the International Organization of Securities Commissions (IOSCO).

The Baltic Exchange has been dual reporting the Supramax 58,000 since 31 July 2015 and has announced that following a successful trial that it will cease publishing the 52,000 dwt assessments from 3 April 2017. Contracts based on the 52,000 dwt weighted average time charter will now settle on a derived value: the formula used by the Baltic Exchange was circulated to its members and published on the Baltic Exchange website. The formula derives the settlement value from the common five routes between the 52,000 dwt and the 58,000 dwt vessel.

From 24 April 2017, dual reporting of the Baltic Panamax vessels will commence, trialling a new larger vessel size, based on a Tess 82,500 dwt gearless panamax. Following market consultation an additional route is now included and the trial 82 weighted time charter average will be based on five routes.

At the same time the Baltic Exchange has set out a proposal to use an Imabari 38,200 dwt geared bulk carrier as the new benchmark vessel to represent the Handysize sector. The current working group recommended the addition of a Pacific based route and consultation with the market is now in its final stage.

The amendments are part of an ongoing quality review of the Baltic Exchange Indices and assessments to ensure that the benchmarks continue to accurately reflect the changing dry bulk shipping fleet profile and cargo flows.

Commenting on the changes, recently appointed Baltic Exchange Chief Executive Mark Jackson said:

“These are important changes that are at various points in our ongoing development cycle. All the amendments have made following extensive consultations with the market. It is important to note that all these amendments are designed to reflect vessel fixtures and cargo flows as required by the International Organization of Securities Commissions (IOSCO). IOSCO requires financial and commodity Index providers to demonstrate through data that their indices are a true reflection of the underlying market.”

For full details of the index changes, including full vessel and route descriptions, seewww.balticexchange.com/news/

About the Baltic Exchange

The Baltic Exchange is the world’s only independent source of maritime market information for the trading and settlement of physical and derivative contracts. Its international community of over 640 members encompasses the majority of world shipping interests and commits to a code of business conduct overseen by the Baltic.
Baltic Exchange members are responsible for a large proportion of all dry cargo and tanker fixtures as well as the sale and purchase of merchant vessels.

In November 2016, the Baltic Exchange was acquired by Singapore Exchange (“SGX”), bringing together complementary strengths of Singapore and London, two of the world’s most important maritime centres.

Baltic Exchange services

• Independent, high quality dry, wet and gas freight market information
• Self-regulated chartering, sale and purchase and freight derivatives markets
• Central forum for competing freight market interests
• Framework ensuring high standards of business practice and co-operation
• London-based business facilities for members

www.balticexchange.com

 

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