2007 FREIGHT DERIVATIVE TRADING VOLUMES UP
Following the first full year of formal reporting of trade volumes by brokers in the dry bulk Forward Freight Agreement (FFA) market, the Baltic Exchange has announced that volumes are estimated to have increased by 34% year on year. Tanker trade volumes are estimated to have increased by 14% year on year.
Total reported trade volume in the dry bulk FFA market for 2007 was 1,868,601 lots (where a lot is a day’s hire of a vessel or 1000 metric tonnes of ocean transportation of cargo). The second half figures of 1,109,141 lots compares with the earliest officially reported figures available which are for the second half of 2006 of 825,050 lots, representing a growth of 34%.
Volumes of dry bulk business being cleared through one of LCH-Clearnet, NOS or SGX increased to 28% for the year.
In the tanker market FFA volumes were estimated to be 374,870,440 tonnes traded, representing a 14% increase over the 2006 figure of 329,434,250 tonnes. In the tanker market cleared business is thought to represent about 46% of volume.
Commenting on the figures Jeremy Penn, Chief Executive of the Baltic Exchange said.
“This data will serve to show newcomers to the market just how much liquidity is now on offer and how successful this market has become. With the high rates achieved, especially in dry in the latter part of the year, the dollar value of contracts will no doubt have increased at an even greater rate. It is noteworthy that the overall cleared figure for the year in dry business underplays the transition which has taken place. In the latter part of 2007 each week more than 50% of business was cleared and in some weeks it was 70%. The development of the tanker market is particularly pleasing recognising that overall the physical market had a quiet year with lower volatility than usual. This bodes well for the future.”
Detailed data
DRY:
| Q1 2007 | Q2 2007 | Q3 2007 | Q4 2007 | Total | |
| OTC | 282,015 | 326,680 | 406,696 | 323,123 | 1,338,514 |
| Cleared | 44,635 | 106,130 | 139,623 | 239,700 | 530,088 |
| Total | 326,650 | 432,810 | 546,319 | 562,822 | 1,868,601 |
| Capesize market % Est | 28.5 |
| Panamax market % Est | 56.1 |
| Supramax market % Est | 15.4 |
| 2nd half 2007 | 1,109,141 |
| 2nd half 2006 | 825,050 |
| % change | 34.4 |
TANKER:
| No of trades | Volumes in MT | $ value of trades | |
| Total OTC | 7,139 | 200,880,440 | 3,384,223,690 |
| Total cleared | 6,312 | 173,990,000 | 3,345,291,182 |
| 2007 TOTAL | 13,351 | 374,870,440 | 6,729,514,872 |
| 2006 Estimates | 12,758 | 329,434,250 | 5,474,277,303 |
| % change | 4.7 | 13.8 | 22.9 |
* The $ value for each trade was calculated by the panellists in the following manner:
$ value = (volume x flat rate 2007 x (Worldscale rate/100))
For further details please contact Bill Lines, Navigate PR
T: +44 (0)20 7369 1653
E: blines@navigatepr.com
Notes to editors
The figures were compiled by the Baltic Exchange and based on submissions from the Forward Freight Agreement Brokers’ Association.
The Association is made up of the following companies:
Banchero Costa
Braemar Spectron
Bravo Tankers
BRS Futures
Clarkson Securities
Ernst Russ
Eugene Futures
Freight Investor Services
GFI Group
ICAP Hyde
Ifchor
IMAREX
McQuilling Brokerage Partners
Mallory Jones Lynch Flynn
Pasternak Baum & Co
Prebon Energy
Simpson Spence & Young
Tradition Financial Services
Toon Yang Futures Trading
Yamamizu Shipping
The Baltic has been publishing reported FFA trading volumes since Q3 2006 and has been publishing reported dry FFA volumes on a weekly basis since July 2007. Tanker FFA volume estimates have been available on an annual basis since 2006.
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 550 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.
