More Chinese firms join Baltic Exchange
A fast-growing region for Baltic Exchange membership is mainland China. The number of Chinese companies joining the Baltic Exchange has risen sharply in the past 24 months, with 24 new member firms now using our services. The Baltic Exchange now has 40 China headquartered companies in membership, as well as 28 subsidiary offices of overseas firms. These include large and small shipowners (Dongguan Yinghao, Ever Wealth, Hede Shipping, Fujian Yipeng), independent shipbrokers (Ever Shine, Joy Marine), charterers and traders (CIEC, Deyesion, Kasam, Keya) from both the dry and tanker sectors looking to access independent freight market assessments; make use of our dispute resolutions service as well as be recognised as part of a global community which respects the Baltic Code.
For many Chinese companies, membership of the Baltic Exchange means better access to the international shipping markets. Several of the new companies to join the Baltic Exchange in recent months have been mainly involved in Chinese coastal trades or with local charterers and are now looking to expand their remit. Volatility in the dry bulk markets has also been a strong driver with several looking to employ more sophisticated freight risk management strategies using Baltic assessments.
According to Ying Sun, the Baltic Exchange’s Shanghai based sales lead, Chinese trading houses are seeing the importance of managing the ocean-based transportation element of their commodity prices.
“This isn’t just for coal and iron ore,” explains Ying Sun. “One new member, CJ International, for example owns several animal feed mills in China and has seen increasing shipping costs for their raw materials (amino acid). They approached Baltic for guidance and are now in touch with a wider network of owners and brokers than before. They can see the bigger global picture thanks to our assessments and fixture reports and they are able to come to us for advice before fixing with an unknown counterparty.”
For Chinese shipping investors the Baltic Exchange offers a unique snapshot five-year view of the financial prospects of dry bulk carriers. The Baltic Exchange Investor Indices are an easy-to-use online dashboard displaying data relevant to vessel investment decisions, residual value, health of earnings, spot and five-year timecharter earnings; purchase & recycling values; and running costs. It offers a high level of clarity and transparency for investors in capesize, panamax, supramax and handysize vessel types.
Forward Freight Agreement (FFA) trading is a tool used by a number of the recent new Baltic members. These companies are able to access forward pricing across all markets as well as open interest and volume data. For any company using Baltic Exchange assessments to settle their trades, being part of the process to develop and amend benchmarks is important. The Baltic Exchange runs Asian Advisory Councils for both dry and wet market participants. These allow members to discuss the development of the Baltic indices and share feedback on proposed changes and new products.
But membership of the Baltic Exchange is about more than just access to data. Ying Sun says that for many Chinese companies, being part of an international institution with over 250 years of history is important.
“Many Chinese shipping and trading firms have only emerged in the past few years. They want to use best shipbroking practice and work in a way recognised by international market participants. Being a member of the Baltic Exchange helps them achieve this.”
Baltic Exchange data
· 30+ daily index and route assessments
· 39 daily FFA forward curves
· 5 daily dry bulk indices
· Two daily tanker indices
· LPG & LNG freight assessments
· Sale & purchase assessments
· Vessel recycling assessments
· OPEX assessments
· Container box indices
· Air Freight indices
· Daily Fixture list & Market reports
· Weekly bunker reports
· Searchable fixture database
· Historical data archive and charting tools
Source: Baltic Exchage