Freight Investor Services, the global leader in freight and commodity derivatives, has concluded the first trade on the new Panamax P8 grains route on its first day of trading.
New route chartered
The new route, offering shipowners and grains market players on the key Brazil-China soybeans route, provides a complementary method of hedging to the existing Panamax P2A route.
The trade, for 5kt of June P8 between two Asian counterparts, was concluded at $33.00 and cleared on NFX.
“It’s great to see a brand new product trading in Asian hours,” says Andreas Loftesnes of FIS who brokered the deal. “The P8 should be a great tool for our current clients and will hopefully encourage some participation from new market participants.”
Forward curves
The market for seaborne transport of soybeans is approximately 150m tonnes per annum, with 95m tonnes of this thought to have been exported to China in 2018, 80% of which originate from Brazil. FIS has been providing forward curves during the new route’s trial period and will continue to contribute curve and settlement price data.
“We are delighted to be at the forefront of a new phase of liquidity in the dry FFAs and see a new trading opportunity come to fruition,” said FIS Founder and Managing Director John Banaszkiewicz. “NFX has proven to be leading innovation in the FFA space.”
Clearing will initially be offered by NFX to the attached specification. FIS clients wishing to trade the new P8 route from March 28 should contact their General Clearing Member to ensure they list the route. The Baltic’s P7 (US Gulf-China) route continues on a trial basis, with FIS continuing to provide forward curve and settlement price data.
Contract Specifications
Santos to Qingdao (min 13m arr draft). 66,000mt HSS, 10% more or less in owner’s option, free in and out, trimmed. 8,000mt Saturdays, Sundays + holidays excluded loading, 8,000mt Saturdays, Sundays + holidays excluded discharge. 24 hrs turn time at loading port, 24 hrs turn time at the discharge port. Loading 15/25 days from index date. Age max 15 years. 5% total commission.
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Source: freightinvestorservices
