Following extensive consultation with Members and market participants on how to derive the 74K-4TC from the 82K-5TC, the Baltic Index Council met on 27 June 2019 to consider the issues, the feedback from the consultation process and the Baltic’s proposals.
The Baltic Index Council has unanimously decided that:
Transition from 74K-4TC to 82K-5TC:
- That a fixed value be used to derive the 74K-4TC from the 82K-5TC. The value will be based on the average differential between the two indices 1 January 2018 to 31 December 2019
- The derived 74K-4TC to commence 1 January 2020
- The 74K routes P1A, P2A, P3A, P4, P5 to cease publication 31 December 2019
- The Baltic will continue to consult with the market and the CCPs about listing the 82K-P2 route
Possible changes to the 82K routes
- The delivery point for route P6 will remain as Singapore
- The Baltic will consult with the panellists regarding removing the guidance for P6 relating to their giving consideration to Busan in their assessment when the US grain season is active
- The weighting for P6 should remain at 30%.
It was the recommendation of the BIC that particular attention be paid to the weighting in the annual review of the indices
The decision of the Baltic Index Council follows a consultation process with Members and market participants, including two written consultation papers issued on 10 April and 31 May 2019. As part of the consultation process, the Baltic also engaged with panellists, the Baltic Advisory Councils, the Freight Forward Agreement Brokers Association and with the relevant clearing houses.
In reaching its decision, the Baltic Index Council considered and took into account the feedback and information provided on the issues raised in the consultation process, in line with the Baltic’s Guide to Market Benchmarks. A summary of the comments received in response to the consultation paper is being made available on the Members’ area of the website, where a copy of the consultation papers has already been published.
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