The Baltic Exchange, through its market data subsidiary, Baltic Exchange Information  Services Ltd (BEISL), and Zhengzhou Commodity Exchange (ZCE) have agreed a memorandum of understanding (MOU) to explore cooperation in the research of shipping derivatives. BEISL and ZCE will work together on research and development of a futures contract settling against the Baltic Panamax Index (BPI) in China.

Established in 1990, ZCE is regulated by the China Securities Regulatory Commission (CSRC). ZCE has launched 23 futures products and 8 options products covering the fields of agriculture, energy, chemicals, textile, construction materials and metallurgical industries. In 2021 its cumulative trading volume was 2.6 billion contracts. According to Futures Industry Association (FIA) statistics, ZCE is the largest futures and derivatives exchange in China and the seventh largest globally. 

The BPI is a composite index comprising five key international Panamax routes. Panamax vessels mainly transport coal, grain and other goods, and are a major force in dry bulk shipping.

Mark Jackson, Baltic Exchange CEO, said: 

"Our globally recognised benchmarks, indices and shipbroking best practices are well respected by international markets.

"The Baltic Exchange is delighted to collaborate with ZCE as we look to develop our presence in China and support new market participants in trading derivatives which reference Baltic benchmarks. 

"The BPI futures will provide a new freight risk management tool for Chinese shipping enterprises. Growth in the bulk freight derivatives markets has in turn long-term benefits for the entire maritime community.

“BEISL has regulated status under the UK Financial Conduct Authority and our benchmarks are audited, verifiable and completely independent.”

ZCE added: 

“By weight, more than 90 percent of dry bulk cargo in international trade is transported by ship. Dry bulk shipping is international in nature, has an active diverse range of participants and frequent freight rate fluctuations. China is a country with large shipping capacity and trading volume. The scale of its dry bulk cargo shipping fleet and import volumes rank first in the world. Chinese shipping enterprises are deeply involved in the international market and are exposed to freight rate fluctuations. In recent years, ZCE has tracked and studied the dry bulk shipping market and relevant indices, and accelerated the expansion of services to this sector.”

ENDS

About ZCE

ZCE was founded in October 1990. With the approval of the State Council of the People's Republic of China, ZCE was established as a pilot exchange in the Chinese futures market and is regulated by China Securities Regulatory Commission (CSRC). ZCE is a membership organization with 164 members.

ZCE has launched 23 futures products, including common wheat, strong gluten wheat, early rice, late indica rice, japonica rice, cotton, cotton yarn, rapeseed, rapeseed oil, rapeseed meal, white sugar, apple, Chinese Jujube, thermal coal, methanol, pure terephthalic acid (PTA), flat glass, manganese silicon, ferrosilicon, urea, soda ash, polyester staple fiber, peanut kernel futures, and 8 options products, including white sugar, cotton, PTA, methanol, rapeseed meal, thermal coal, rapeseed oil and peanut kernel options. In 2021, its trading volume was 2.6 billion contracts. According to FIA statistics, it is the largest futures and derivatives exchange in China and the seventh largest globally.  

About Baltic Exchange:

The Baltic Exchange is the world’s only independent source of maritime market information for the trading and settlement of physical and derivative contracts. Its international community of over 600 members encompasses the majority of world shipping interests and commits to a code of business conduct overseen by the Baltic.

Baltic Exchange members are responsible for a large proportion of all dry cargo and tanker fixtures as well as the sale and purchase of merchant vessels.

In November 2016, the Baltic Exchange was acquired by Singapore Exchange (“SGX”), bringing together complementary strengths of Singapore and London, two of the world’s most important maritime centres.

Full details, including Baltic Exchange market data and fixtures, can be found at www.balticexchange.com

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