Shanghai INE exchange raises shipping index margin as prices soar

Shanghai’s International Energy Exchange (INE) has adjusted trading requirements for its container shipping index for a second time within a week as prices jump following attacks on vessels in the Red Sea.

INE’s most-traded April container shipping index European line futures soared 20% to 1,744.9 index points on Wednesday.

The contract has gained 78% since the beginning of last week, boosted by expectations of lower shipping capacity and higher costs caused by shipment rerouting.

The attacks by Iran-aligned Yemeni Houthi militant group on vessels have forced leading shipping companies to reroute to avoid the Suez Canal.

The exchange alerted investors to the increased risks currently. “Recently, the market is facing a lot of uncertainties, members and investors should enhance risk prevention and make rational investment.”

From Wednesday’s close, the exchange will raise the margin ratio and trading bands – which limits how much values can fluctuate – following changes earlier this week.

For the April and June contracts, the margin ratio will be raised to 22% from 19%, while the trading band, which limits how much values can fluctuate, will be widened to 20% from 17%.

For the August, October and December contracts, the margin ratio will be adjusted to 20% from 17%, and the trading band to 18% from 15%.

Globally, shipping rates have climbed sharply in recent weeks but have still remained far below the pandemic era.
Source: Reuters (Reporting by Siyi Liu, Andrew Hayley and Beijing Newsroom; Editing by Christian Schmollinger and Jane Merriman)