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Saturday, January 25, 2020

Maritime Logistics Professional

December 27, 2019

First LNG FFA Trades via CME Group

AdobeStock / © Kasto

AdobeStock / © Kasto

Affinity (Shipping) LLP, a shipbroker, said this week in a statement it had facilitated the first trades in CME Group's liquefied natural gas (LNG) freight futures contracts.

The trades involved French energy major Total and commodities trader Trafigura and were submitted for clearing using CME Group's ClearPort system, Affinity said

Earlier in December, CME Group said it would be the first futures exchange to launch trading of three LNG freight futures contracts in response to growing demand for hedging tools on the LNG market

"Since we arranged the initial bilateral LNG forward freight agreement (FFA) trades over the summer, the market has expressed a strong desire to be able to trade these contracts on a cleared basis," said Benjamin Gibson, Head of LNG Derivatives at Affinity

The contracts offered by CME Group are based on the assessment of three LNG shipping routes that the London-based Baltic Exchange started publishing earlier this year

LNG Freight futures are available to trade on the New York Mercantile Exchange (NYMEX).

Reporting by Ekaterina Kravtsova

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