Clarkson : Clarksons’ brokers world’s first LNG 174 cbm freight futures trade on the CME Group

Clarksons' brokers world's first LNG 174 cbm freight futures trade on the CME Group

06/03/24

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In a positive development for the LNG derivative market, Clarksons, a global leader in shipping services, has brokered the world's first 174cbm LNG Forward Freight Agreement (FFA) trade on the Chicago Mercantile Exchange Group (the CME).

The trade was a Calendar 2025 - 2026 BLNG2g 174, Sabine to Isle of Grain, at $75,000 per day.

LNG FFAs are financial derivatives that provide market participants with a flexible and efficient tool to hedge against future freight rate fluctuations, allowing for better risk management and enhanced decision-making in the dynamic LNG shipping market. Three different 174 LNG FFAs are now available to clear through the CME and are derived from the Baltic Exchange LNG route assessments.

Clarksons' role as the broker in this historic trade underscores its position as a leading force in the maritime industry, consistently driving innovation and paving the way for new possibilities in LNG trading.

Christian Greenop, from Clarksons' FFA team, who brokered the transaction, said:

"After a record year in LNG FFA trades in 2023 we are very happy to have a 174,000cbm product available to trade. There are over 300 2-stroke vessels due to be delivered between now and 2028, on top of the 207 already in the market. This will make up around 60% of the global LNG fleet and we feel this product will be a natural part of that growth story."

Chris Greenop Head of LPG Desk, Wet FFA

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