Freight Investor Services (FIS), a world-leading broker in freight and commodity futures markets, is at the forefront of Container freight futures as Singapore Exchange (SGX) are due to launch a Container futures contract.
Singapore Exchange (SGX) will launch four Container futures contracts on the 20th of February for trading and clearing and corresponding over-the-counter forward freight agreement contracts (FFA) for clearing. The container market is a large, complex, and systemically volatile market at the core of the global economy. Driven by high market indexation since 2008, this has driven the growth in contracts designed to manage risk and develop additional opportunities. Greater volatility, geopolitical uncertainty, and post-pandemic effects disrupting supply chains have driven more interest in the last few years.
Annualised 30-day volatility was 34.2% in 2022 and 36.4% Year to Date (YTD).
Freight Investor Services (FIS) is the leading broker of freight derivatives, having been one of the pioneering brokers of the market and posting a dominant share of cleared FFA volumes. SGX named FIS the top broker on freight and bulk commodities for the last ten years, and FIS have worked hard to help the market access flows from Asia. As a first-mover, FIS traded the first new round of container freight futures in 2022, produced by leading freight benchmark provider the Baltic Exchange, in partnership with Freightos, published and audited via the Baltic Exchange in London and now trading cleared on the Chicago Mercantile Exchange (CME) Group in the USA.
Peter Stallion, Container FFA Broker at FIS, said,
“The launch of Freightos Baltic Index (FBX) Settled container freight futures on SGX comes at an opportune time, with recent volatility in freight rates impacting all businesses in the container freight ecosystem. SGX provides greater access for clients in Asia, and those already trading in the
liquid dry FFAs market, providing an excellent opportunity to develop container futures volume. We look forward to taking a leading role as this market develops.”
For more information and prices, please get in touch with Peter Stallion at
peters@freightinvestor.com
The SGX contract consists of four main East-West routes; FBX01 (China/East Asia – US West Coast), FBX03 (China/East Asia – US East Coast), FBX11 (China/East Asia – North Europe), and FBX13 (China/East Asia – Mediterranean). SGX reported that the main East-West trade routes account for
approximately 40% of the global container trades. 48% of the East-West trade comes from the Trans-Pacific trade routes, 40% from the Asia-Europe trade routes, and the rest from the TransAtlantic routes. The contract will be USD/FEU (US Dollar/forty-foot equivalent unit), with a contract size of 1 FEU/lot. There are Swaps/futures of up to three calendar years forward and reduced counterparty credit risk with multilateral netting of opposite positions.
For further details on the contract, please access the SGX Container Freight Factsheet.
https://fisapp.com/wp-content/uploads/2023/02/SGX-Container-Freight-Factsheet.pdf
“We are seeing increasing demand for Container FFA trading solutions with increased volatility. Thisis another great example of how FIS are pioneers and innovators in new ways of risk management,being market leaders in commodities and continuing to develop new opportunities,” said Alex Pereira-Inacio, Chief Commercial Officer at FIS.
FBX routes are listed in the FIS LIVE App – a bespoke freight and commodity futures web app across desktop and mobile devices that provides FIS customers access to real-time live futures pricing and analysis across all FIS covers. New and existing clients can access the FIS LIVE platform by registering
at https://freightinvestorservices.com/fis-live/ accessing real-time pricing, price alerts, historical charting, cross-product view, and news across all our freight and commodity markets. About Singapore Exchange (SGX)
SGX is Asia’s leading and trusted securities and derivatives market infrastructure, operating equity, fixed income, currency, and commodity markets to the highest regulatory standards. In addition, SGX is Asia’s most international, multi-asset exchange, with contracts cleared through it, mitigating
the risk of contract default. For more information, visit SGX website – https://www.sgx.com.
About FIS
FIS is a global brokerage firm specialising in freight and commodity markets. Named by Singapore Exchange (SGX) last year as the top broker overall for bulk commodity derivatives, including Iron Ore, Dry Bulk Freight (FFAs) and Coking Coal, a position FIS have held for the last ten years.
FIS is a pioneer and innovator in the commodity derivatives markets with a proven and profitable track record of first mover advantage. It has a global presence, with offices in the United States, United Kingdom, Denmark, UAE, India, Singapore, China, and Japan providing a 24-hour service
network to our customers. Present in all major commodity derivatives markets globally and an Intern-Dealer (IDB) participant at
SGX, NASDAQ, CME, ICE, EEX, and DCE. FIS holds a licence to broker FFAs in RMB via Shanghai Clearing House and acts as RIB member of the LME. For more
Contact
FIS – Peter Stallion | T: +44 (0) 204 518 2143 | E: peters@freightinvestor.com
