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First LNG freight futures trades via CME Group agreed – brokers

Tuesday, 07 January 2020 | 12:00

Affinity (Shipping) LLP, a shipbroker, said this week in a statement it had facilitated its first trades in CME Group’s liquefied natural gas (LNG) freight futures contracts

The trades involved French energy major Total and commodities trader Trafigura and were submitted for clearing using CME Group’s ClearPort system, Affinity said

Shipping broker Clarksons said it had done the first ever LNG freight futures trades on CME between commodity traders Vitol and Trafigura on Dec. 23

Earlier in December, CME Group said it would be the first futures exchange to launch trading of three LNG freight futures contracts in response to growing demand for hedging tools on the LNG market

“Since we arranged the initial bilateral LNG forward freight agreement (FFA) trades over the summer, the market has expressed a strong desire to be able to trade these contracts on a cleared basis,” said Benjamin Gibson, Head of LNG Derivatives at Affinity

The contracts offered by CME Group are based on the assessment of three LNG shipping routes that the London-based Baltic Exchange started publishing earlier this year

LNG Freight futures are available to trade on the New York Mercantile Exchange (NYMEX)
Source: Reuters (Reporting by Ekaterina Kravtsova, editing by Louise Heavens)

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