LNG

Simpson Spence Young (SSY), the world's largest independent shipbroker established in London in 1880 and a key participant in the LNG business, has acquired Piraeus, Greece-based Anchor Shipbroking.

The London-based Baltic Exchange is starting its first full week of issuing independent indices for liquified natural gas propulsion fuel, based on vessels burning LNG rather than marine fuel oil or marine gas oil as their primary fuel.

The London-based Baltic Exchange, the main independent global source of maritime market information for the trading and settlement of physical and derivative shipping contracts, has named LNG Hub Singapore as the leading global shipping centre.

The London-based Baltic Exchange has added quarterly assessments (GOPEX) on the cost of operating liquefied natural gas carriers and and liquefied petroleum gas tankers to its growing suite of shipping investor tools.

The Baltic Exchange Escrow Service continues to gain traction, with new transactions completed in the fourth quarter of 2019 and the first three months of 2020.

The Baltic Exchange, owned by the Singapore Exchange, follows a robust due diligence process and complies with the Monetary Authority of Singapore requirements without compromising on flexibility and service speed to ensure the transactions are handled seamlessly. 

This is reinforced by the strict internal control of fund movements from the dedicated escrow account held with AA-rated Singapore banks Overseas-Chinese Banking Corp (OCBC) and United Overseas Bank (UOB).

The escrow service, operated from Singapore, facilitates both shipping and non-shipping transactions around the world. 

Escrow services give certainty to all sides in a transaction that payments will be made on completion as they are held by a trusted third party.

In LNG, the London-based Exchange collects data from shipping brokers to provide assessment of three routes on the CME Group trading platform.

These form the basis for a suite of assessments for gas shipping and freight contracts, the first LNG derivative swap took place in July 2019, with cleared trades following since then as company built open-interest positions.

The LNG swaps based on shipments from Australia’s Gladstone port in Queensland to Tokyo, from the US Sabine Pass LNG plant in Louisiana, owned by Cheniere Energy, to the UK. A third freight contract is from Sabine Pass to Tokyo.

So far the Baltic Exchange’s transactions supported by escrow have included asset sales and disputes. However, the service is available for any transaction requiring an escrow agent. 

The Baltic Exchange is an independent organisation whose international membership is mainly made up of shipowners, shipbrokers and charterers. 

It is the provider of trusted benchmarks and settlement data in the shipping industry. Its escrow service builds on this independence and trust. 

Users of the service are assured of the highest levels of confidentiality, professionalism and security. 

“The Baltic Exchange acted as escrow agent in the context of a recent sale and purchase transaction providing a professional, swift and efficient support at each stage of the process,” said customer  Federico Grimaldi, Sale &Purchase Manager at shipping company Vroon B.V.

“A customer-oriented approach, professionalism and high responsiveness of the Escrow team allowed for a seamless transaction,” added Grimaldi.

Dmitry Pismenny, who heads up the escrow service, said that the Exchange was very pleased to see growing interest in the escrow service. 

“Our flexibility and efficiency in supporting different types of transactions has earned plaudits from our clients.,” added Pismenny.

March 5 (LNGJ) - Shipping charter rates for LNG carriers in the spot market have fallen again amid the global over-hang of volumes. Rates were quoted at an average of between $39,000 per day and $34,000 per day West of Suez and $38,000 per day and $33,000 per day East of Suez for vessels of between 155,000-165,000 cubic metres capacity, according to various brokers. One-year time charters for vessels of between 155,000-160,000 cubic metres capacity were seen at around $61,000 per day.

The Baltic Exchange freight derivatives markets for both tankers and dry cargo vessels saw increased traded volumes last year when the exchange also launched the first Forward Freight Agreement (FFA) trades in the LNG market. 

Settled against the Baltic’s recently launched suite of assessments for gas shipping, the first LNG swap took place in July 2019, with cleared trades following at the end of 2019 and open-interest building.

The Exchange said in its annual review that freight derivatives markets for both tankers and dry cargo vessels saw increased traded volumes in 2019.

In LNG, the London-based Exchange collects data from shipping brokers to provide assessment of three routes on the CME Group trading platform.

These are from Australia’s Gladstone port in Queensland to Tokyo, from the US Sabine Pass LNG plant in Louisiana, owned by Cheniere Energy, to the UK. A third freight contract is from Sabine Pass to Tokyo.

In the overall freight derivatives markets Tanker Forward Freight Agreement (FFA) volumes were up 38 percent in 2019 compared the previous year, reaching 473,113 lots. 

Dry FFA volumes hit 1,632,773 lots, up 11 percent on 2018. 

One lot is defined as a day’s hire of a vessel or 1000 metric tonnes of ocean transportation of cargo.

“It was another solid year in 2019 for the freight derivatives market,” said, Baltic Exchange Chief Executive Mark Jackson.

“Underpinning these volumes are both volatility in the freight markets and trust in the Baltic Exchange’s settlement data,” he said.

“Last year both the dry bulk and tanker markets experienced big swings, with issues ranging from the Vale iron ore disaster, attacks on tanker shipping in the Middle East and IMO2020 impacting sentiment,” added Jackson.

The Exchange has also just launched in February 2020 daily spot ocean freight rate indices for 40-foot containers (FEUs).

The rate is now available via the Exchange and the Freightos Group, adding real-time, transparent price discovery and risk mitigation into the container freight market that powers global trade. 

The Freightos Baltic Index (FBX) has been produced weekly since April 2018 by digital freight platform Freightos, based off of live pricing data from hundreds of global logistics providers.

“With the robust, real-time data, as well as oversight from the Baltic Exchange, the FBX is positioned better than ever to provide a true pulse of the market in one of the world’s largest and most important industries,” said Freightos CEO Zvi Schreiber.

“Container shipping pricing has become volatile and FBX will be the foundation of index-linking and future derivatives which allow carriers, forwarders and imports-exporters to hedge their risk, as is already customary in other industries,” added Schreiber.

The Exchange, which already manages a diverse range of benchmarks for the global shipping markets, is also in the process of applying for Benchmark Administrator status with the UK’s Financial Conduct Authority (FCA).   

Clarksons, the London-based ship brokers and shipping and financial services company, said it had completed the world’s first LNG freight futures trade at year-end involving two of the leading global commodities traders.

CME Group, the world's leading derivatives marketplace, reported its December and full-year 2019 market statistics, showing it reached average daily volumes in energy of 2.1 million contracts per day for products such as crude oil, natural gas and LNG, and now including a new LNG freight future.

The Energy Market Authority of Singapore is advancing with plans for a second regasification and storage terminal in the city state as it aims to confirm its position as an Asian LNG hub with a high representation of global trading firms and LNG bunkering availability.