Baltic FFA data for S&P Global GSCI Freight Index Series
Baltic Exchange dry bulk forward price assessments have been incorporated into the new S&P Dow Jones GSCI Freight Index Series.
The GSCI started life in 1991 and is a major investable commodity index which is used by asset managers, investment banks and others to measure, track and analyze the global commodity markets. It is a broad-based index which is one of the most widely recognised benchmarks for the sector.
The move potentially brings new institutional investors into the freight derivative market who will now be able to write individual products for freight. These could include Exchange-Traded Funds (ETFs), Mutual Funds and Structured Products. As global market participants increasingly seek to diversify their investments and look for alternative vehicles to tap into the niche market segments, the S&P GSCI Freight Index Series could be a meaningful gauge of global economic activity, seaborne trade and individual commodity and geographic market dynamics.
The new product has been created in collaboration with shipping analysis and technology company TonnEdge.
The Index Series includes the:
· S&P GSCI Freight Capesize (Monthly)
· S&P GSCI Freight Capesize (Quarterly)
· S&P GSCI Freight Panamax (Monthly)
· S&P GSCI Freight Panamax (Quarterly)
Commenting on the move, Fiona Boal, Head of Commodities and Real Assets, S&P Dow Jones Indices said:
“Disruptions to global supply chains over the last few years have put global freight markets in the spotlight, highlighting their important link in the chain of the world economy and contributions to international trade. We are pleased to have collaborated with the Baltic Exchange and TonnEdge to fill a market gap and bring the S&P GSCI Freight Indices to life. As global investors increasingly seek to diversify their investments and look for alternative vehicles to tap into niche market segments, this index series can be a meaningful gauge for the final value of this commodity.”
Dry bulk FFA volumes hit 2,524,271 lots in 2021, up 61% on 2020. FFA volumes based on Capesize and Panamax vessels accounted for approximately 90% of the underlying physical dry bulk market.
S&P Global has published a useful article looking at the new product in more detail.
Source: The Baltic Exchange