Singapore Exchange sets up derivative container market

THE Singapore Exchange (SGX) is to off trade four new container swap contracts effective August 2 based on the freight rate for shipping containers between two ports and working on much the same hedging principle as dry bulk and tanker markets.

According to United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) and the Korea Maritime Institute (KMI) Asian container traffic is forecast to account for 68 per cent of total container exports and 56 per cent of container imports globally by 2015.

The contracts will cover four main freight routes from Shanghai to Europe, Mediterranean, US west coast and US east coast in order to manage credit risk on the container freight derivates market.
(Source:www.schednet.com)