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Will the Baltic’s latest move stimulate freight derivative trading?
The Baltic Exchange announced last week that is will be calculating Tanker Time-Charter Equivalent Assessments (TCEs) based on bunker prices which are in line with the bunker swaps market.
From today (August 2, 2010) the basis for TCE conversions on its various routes will be Rotterdam 380 cst, Rotterdam 380 cst max 1 per cent sulphur or Singapore 380 cst. (Unsure what cst stands for? See the wikipedia definition on centistoke)
Bunker prices will be provided by Bunkerworld with port costs coming from Braemar Seascope Group company Cory Brothers and exchange rates used in the calculations provided under licence by XE.com.
The calculation process is a transparent one with subscribers to the Baltic Exchange’s freight market services being able to access a voyage calculator which shows all the parameters set when arriving at the TCE rates.
Will this move stimulate growth in trading? What do you think?
