The Baltic Exchange is to try running daily time-charter rate for a variety of tanker types from next month. The rates will initially cover VLCCs, with trials of similar derived rates for other vessels following later. The Time-Charter Equivalent will be calculated using a variable feed of bunker costs and exchange rates for adjusting port costs.
The ‘basic’ vessel will be a 300,000dwt unit using 90 tonnes a day at 14.5kt. TCEs will be an average of the rates derived from TD1 (280,000 tonnes Ras Tanura/LOOP) and TD3 (260,000 tonnes Ras Tanura/Chiba). “Expressing tanker assessments as a dollar timecharter equivalent is an important step for a significant number of trading companies and will help develop the tanker FFA market,” said Baltic Exchange chief executive Jeremy Penn.
The Baltic’s tanker assessments are currently expressed as Worldscale. The move is designed to help the tanker freight derivative industry price its contracts in a more transparent fashion. If the trial is successful, the Baltic will extend it to four vessel sizes.
The ‘basic’ vessel will be a 300,000dwt unit using 90 tonnes a day at 14.5kt. TCEs will be an average of the rates derived from TD1 (280,000 tonnes Ras Tanura/LOOP) and TD3 (260,000 tonnes Ras Tanura/Chiba). “Expressing tanker assessments as a dollar timecharter equivalent is an important step for a significant number of trading companies and will help develop the tanker FFA market,” said Baltic Exchange chief executive Jeremy Penn.
The Baltic’s tanker assessments are currently expressed as Worldscale. The move is designed to help the tanker freight derivative industry price its contracts in a more transparent fashion. If the trial is successful, the Baltic will extend it to four vessel sizes.