Shanghai Plans New Container-Futures Market

25 February 2010 (Last Updated February 25th, 2010 18:30)

Shanghai Shipping Exchange is planning to set up a container-shipping derivates market by the end of the year. The forward freight agreements (FFA), which helps guard against fluctuations in shipping rates, will be targeted at small and mid-size exporters, who need volumes for long-term

Shanghai Shipping Exchange is planning to set up a container-shipping derivates market by the end of the year.

The forward freight agreements (FFA), which helps guard against fluctuations in shipping rates, will be targeted at small and mid-size exporters, who need volumes for long-term shipping contracts.

Investment bank Morgan Stanley last month backed the first FFA tied to a Shanghai container index, according to Bloomberg.

The weekly Shanghai Containerized Freight Index that tracks spot rates for shipments on 15 routes will partner with a settlement bank and an electric-trading systems provider to set up the futures trading platform.

The data, compiled from 15 shipping lines and 15 freight forwarders, reflects more than 60% of global container-shipping.