Following extensive consultation with members and market participants on the implications of the IMO 2020 sulphur cap for the Baltic’s indices, the Baltic Index Council met on 19 March 2019 to consider the issues, the feedback from the consultation process and the Baltic’s proposals.

The Baltic Index Council has unanimously decided that:

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  • It shall be clarified that the benchmark vessel for all timecharter indices is a “non-scrubber fitted vessel”

This clarification is a “Scheduled Change” under Section 13 of the Guide to Market Benchmarks,made to add clarity in response to an announced regulatory change, and where, in the view of the Baltic Index Council, any impact on the levels reported by panellists is expected to be minor but is not certain. The Baltic Index Council does not consider that material market disruption to physical and derivatives open interest would result from this clarification.

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  • No changes are required to either the Dry or Tanker Voyage route descriptions.

The Baltic Index Council further decided that this clarification will apply from 1 April 2019. 

The Baltic will implement the clarification in the following terms (additional wording underlined):

Baltic Exchange Capesize 2014 Index (BCI)

  • "The Baltic capesize 2014 vessel for timecharter routes is a non-scrubber fitted vessel based on the following description:…"

Baltic Exchange Panamax Index (BPI) and Baltic Exchange Panamax (BEP) Asia

  • "The Baltic panamax vessel for timecharter routes is a non-scrubber fitted vessel based on the following description:…"


Baltic Exchange Supramax Index (BSI) and Baltic Exchange Supramax (BES) Asia

  • "The Baltic supramax vessel for timecharter routes is based on a non-scrubber fitted standard“Tess 58” type vessel of the following description:…”


Baltic Exchange Handysize Index (BHSI)

  • “The Baltic Exchange handysize vessel for timecharter routes is a non-scrubber fitted vessel based on the following vessel description:…"”]

The decision of the Baltic Index Council follows a robust consultation process of over 12 months with members and market participants, including a written consultation paper issued on 30 January 2019. As part of the consultation process, the Baltic also engaged with panellists, the Baltic Advisory Councils, the Freight Forward Agreement Brokers Association and with the relevant clearing houses.

In reaching its decision, the Baltic Index Council considered and took into account the feedback and information provided on the issues raised in the consultation process, in line with the Baltic’s Guide to Market Benchmarks.On the key issues raised in the consultation paper, the Baltic Index Council considered, amongst other things, that:

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  • No change was required to the existing fuel reference in the timecharter indices, which represents all the physical fuels a vessel is required to burn up to a limit of 380cst (380 cst being a guide to viscosity not sulphur content).

The index vessel should remain a non-scrubber vessel, consistent with the view that the existing index vessel is not scrubber fitted. Members of the Baltic Index Council also noted views expressed by Baltic panellists (including a majority of Capesize panellists) that they would be unable to reliably provide prices for a scrubber fitted vessel based on current penetration in the market.

Confirming that the index vessel remains a non-scrubber fitted vessel after 1 January 2020 provides clarity to the market and any impact on levels reported by panellists is expected to be minor but is not certain. The Baltic Index Council does not consider that material market disruption to open interest would result from this clarification]

A summary of the comments received in response to the consultation paper is being made here, where a copy of the consultation paper, which included a summary of the consultation process and stakeholder feedback up to the date of its issue, has already been published.

Please direct any questions to balticbroker@balticexchange.com.