BALTIC EXCHANGE LAUNCHES SHIP DEMOLITION ASSESSMENTS
The Baltic Exchange is set to launch an independent benchmark on the demolition values of bulk carriers and tankers. Testing of the data for the Baltic Demolition Assessments (BDA) will begin on 12 July with an official launch expected in the autumn. The assessments will be based on the following criteria:
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Per long tonne light displacement derived from a dirty tanker of between 15,000 and 25,000 light weight, gas free for man entry. Delivery China (15/30 days), as is, under own power, cash price, basis standard commission.
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Per long tonne light displacement derived from a dirty tanker of between 15,000 and 25,000 light weight, gas free for man entry. Delivery Subcontinent (15/30 days), as is, under own power, cash price, basis standard commission.
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Per long tonne light displacement derived from a product tanker of between 6,000 and 10,000 light weight, gas free for man entry. Delivery China (15/30 days), as is, under own power, cash price, basis standard commission.
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Per long tonne light displacement derived from a product tanker of between 6,000 and 10,000 light weight, gas free for man entry. Delivery Subcontinent (15/30 days), as is, under own power, cash price, basis standard commission.
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Per long tonne light displacement derived from a bulk carrier of between 7,000 and 12,000 light weight. Delivery China (15/30 days), as is, under own power, cash price, basis standard commission.
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Per long tonne light displacement derived from a bulk carrier of between 7,000 and 12,000 light weight. Delivery Subcontinent (15/30 days), as is, under own power, cash price, basis standard commission.
The assessments will be published on a weekly basis and based on contributions from ship demolition brokers at ACM Shipping, Clarksons, Compass Maritime, Galbraiths, JV Shipping and Simpson Spence & Young.
The assessments will be expressed in US dollars and will be subject to the same auditing procedures as other Baltic assessments.
Baltic Exchange Chief Executive Jeremy Penn said:
"This is a big step for the shipping markets as for the first time it enables the development of derivative products which offer some protection against the fluctuating values of ship scrapping prices. The Baltic's independent data already underpins the flourishing freight derivatives trade and the ongoing development of sale and purchase derivatives. The shipping markets are increasingly looking to innovative derivative products to manage risk in an inherently volatile arena."
He added:
"Using Baltic data as the settlement price, it is now possible to trade Forward Freight Agreements during a vessel's entire working life, trade Sale and Purchase Forward Agreements on its second hand value and soon to trade the demolition value."
ENDS
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Notes to editors
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 500 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. Commissions from chartering and sale and purchase in 2002 (latest available figures) amounted to more than US$½ billion.
Baltic Demolition Assessments will be available to Baltic members and subscribers on www.balticexchange.com.
Baltic Exchange services
- Independent, high quality dry, wet and gas freight market information
- Self-regulated chartering, sale and purchase and freight derivatives markets
- Central forum for competing freight market interests
- Framework ensuring high standards of business practice and co-operation
- London-based business facilities for members
- A collective voice for members worldwide
Freight market information
The Baltic Exchange provides the shipping market with the following information:
- Six daily indices covering capesize, panamax, handymax dry bulk carriers and tankers carrying clean and dirty products
- 40 separate route assessments
- Mark-to-market information
- Four dry cargo reports
- Second-hand ship values
- Daily dry cargo fixture list
Self-regulated market
The Baltic exercises a light-handed supervision of the shipping market through a self-regulatory process and expects its members to conduct their business within a set of defined guidelines and work practices encapsulated in its 260 year old motto "Our Word Our Bond."
Between April 2003 and end of March 2004, the Baltic's dispute resolution service collected nearly US$ ½ million on behalf of members for unpaid commissions, demurrage claims and arbitration awards.
