The day began with a freight derivatives workshop on how to hedge freight rates using FFAs, hosted by the FFABA, with presentations from John Banaskiewicz, MD – Freight Investor Services and Duncan Dunn, Senior Director – SSY Futures. The session gave attendees an insight into the mechanics of trading FFAs, and also brought into focus how time charter baskets can be used to hedge physical trades as well as giving an overview of the derivatives marketplace and guidance on how trades are processed.
The workshop was then followed by a meeting for tanker market participants to join Baltic panellists and discuss the routes and vessels used within the current suite of Baltic tanker market benchmarks as well as upcoming changes and proposals. As the major tanker market discussion of the year, members were given the opportunity to put across their views and benchmark suggestions on tanker and LPG routes and vessel descriptions.
The Freight and Commodities Forum was the main event and this was opened by Baltic Exchange CEO Mark Jackson, who highlighted plans to build panamax FFA market liquidity by moving forward the time of publishing the Baltic’s panamax assessments to better fit with the Asian working day. A proposal will be discussed at the next Baltic Council meeting in October. The Baltic has also started a consultation process with market participants about a new weekly assessment for the LNG sector.
Freight market analysts from Clarksons, Macquarie Group and EA Gibsons Shipbrokers then gave a series of presentations.
Henriette Van Niekerk, head of dry bulk analysis at Clarksons, gave an upbeat presentation on dry bulk markets, commenting that the dry bulk was now recovering from a record low in 2016. In contrast, Serafino Capoferri, commodity research analyst, Macquarie Group gave a slightly bearish overview of dry and wet commodity fundamentals.
The forum ended with a tanker market overview from Richard Matthews, head of research, EA Gibsons Shipbrokers, who predicted that tanker markets would remain in a challenging place for the next 18 months, and that new vessel orders may delay the recovery in earnings.
Photos from the event can be found on the Baltic Exchange Flickr page here.