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Handysize 38kt time charter average FFA is 'perfect timing'


Handysize 38kt time charter average FFA is 'perfect timing' 


Forward freight agreement (FFA) trades for a basket of 38,000-dwt handysize time charter rates will help operators take longer-term cover with less risk, says leading shipbroker Simpson Spence Young.


Following an ever-strengthening charter market, SGX have confirmed a launch date for the new offering as 19 April 2021, with EEX aiming for early May pending regulatory approval, both exchanges are keen to promote clearing of the new contract.


The handysize futures market was previously based on the Baltic Exchange's old 28,000-dwt benchmark and the Baltic Exchange launched its benchmarks for 38,000-dwt handysizes in March 2018.


There were no paper trades last year because the derivatives were not brokered or being cleared.


But amid a booming market, Simpson Spence Young believes there's now plenty of liquidity and willing participants.


"Very often an applicant comes to us initially talking about exposure in the handy sector and we've been directing them to the proxy available in the supramax," said Duncan Dunn, Senior Director at SSY Futures.


Mark Douglas, FFA broker and Supramax and Handysize specialist at SSY Futures also commented that -

“This is the perfect timing to introduce the Handysize 38kt average time charter FFA and we've already spoken to many counterparties eager to partake. FFA market volumes are up 100% for both Panamax and Supramax this year and the new H7TC 38kt has also attracted attention from a number of clients who currently don't have any exposure to the paper market at all.”


“The handysize 38kt draws on a diverse range of cargoes encompassing minerals, metals, agricultural and forest products and, crucially, has shown to have demand drivers distinct from other sizes,” explained Derek Langston, Head of Consultancy and Research at SSY. “Thanks to fleet developments, the handysize 38 index is poised to consolidate its status as representative of a large segment of the dry bulk carrier fleet and is therefore deserving of its new FFA contract in one of the most intriguing freight markets seen in recent years.”


“EEX is very committed to the Freight space and our focus now is on working to develop and expand the market even further," said Richard Heath, EEX’s Head of Global Commodities. "The demand that we've witnessed is strong. We've spoken to a lot of clients and the feedback is unanimous - the market needs this. It can also bring back some organisations who have been out of the market for some time."


Richard Heath, Derek Langston, Duncan Dunn and Mark Douglas were speakers at the 'Handysize 38kt – Navigating the Future' webinar, hosted by Simpson Spence Young. They were also joined by Hans Christian Oleson, Chairman of the Baltic Exchange European Advisory Council, and Andy Symonds, Senior Freight Market Assessor at The Baltic Exchange.






Simpson Spence Young press contact


Media Relations: Issued by Navigate PR on behalf of Simpson Spence Young. For further details please contact Alex Wood.



T: +44 (0)77 3053 5104


About SSY Futures Ltd


SSY Futures Ltd is one of the largest Dry Bulk and Freight derivatives brokerages in the World, with brokers in London, Singapore and Stamford. SSY Futures specialises in the steel complex and base metals derivatives as well as Forward Freight Agreements, with a new energy business targeting gas and power contracts. SSY Futures is a wholly owned subsidiary of Simpson Spence Young.


About Simpson Spence Young


Established in 1880, Simpson Spence Young (SSY) is the world's largest independent shipbroker. Our 400 employees cover each major market including dry cargo chartering, tanker chartering, LNG chartering and projects, ship sale and purchase, chemical chartering, consultancy and research, futures and towage.


SSY has a global reach, with offices in London, Singapore, Houston, Shanghai, Stamford - USA, Sydney, Geneva, Bergen, Hong Kong, New York, Mumbai, Madrid, Oslo, Sao Paulo, Copenhagen, Tokyo, Vancouver, Dubai, Varna and Zug.