UAE – Mubasher: Freight derivatives markets showed higher traded volumes in 2019 for both tankers and dry cargo vessels, data by the Baltic Exchange showed. 

Tanker Forward Freight Agreement (FFA) volumes increased by 38% year-on-year (YoY) to reach 473,113 lots, while Dry FFA volumes registered 1.63 million lots, up 11% when compared to 2018, said a press release on Tuesday.  

Commenting on the figures, the Baltic Exchange chief executive, Mark Jackson, said, "Underpinning these volumes are both volatility in the freight markets and trust in the Baltic Exchange’s settlement data. 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.”

“One lot is defined as a day's hire of a vessel or 1000 metric tonnes of ocean transportation of cargo,” the statement said.

It is worth pinpointing that the first FFA trades in the Liquefied Natural Gas (LNG) market took place in July 2019, which though settled against the Baltic’s suite of assessments for gas shipping, had cleared trades following at the end of 2019 and open interest building.