Shanghai starts trading forward freight futures
June 30, 2011 Category Logistics, Ports & sea transport
The Shanghai Shipping Freight Exchange Co started trading in China’s first forward freight futures, allowing cargo owners, export manufacturers and shipping companies to hedge risk amid fluctuating shipping rates. “The new derivative is a key step towards expand shipping financing in Shanghai, and that’s important for one of the world’s biggest ports,” said Zhi Guanglu, Vice Director of the Water Transportation Bureau of the Ministry of Transport. The Exchange, the first of its kind in China, provides forward freight rate contracts based on shipping rates on the China-Western American route and the China-European route. Freight derivative trading on each route has six contracts, maturing from July to December. The exchange requires a 10% margin for each trader. Zhang Ye, President of the Shanghai Shipping Exchange and Chairman of Shanghai Shipping Freight Exchange Co, rang the bell for trading in the new contracts on the opening day.
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