SGX's Baltic Exchange Eyes Shipping Index

London's Baltic Exchange said January 11 it has formed a LNG panellists group, as it aims to develop an index comprising various LNG shipping rates. 

In the 1980s the exchange launched day-charter rate indices for dry bulk shipping and oil tankers on popular routes, extended the model to other types of shipping, and now plans something similar for LNG.

Affinity, Braemar ACM, Clarksons and SSY -- all shipbrokers with considerable experience of the LNG sector -- are the first members of the newly-formed 'Baltic LNG Panellists Group'. Various routes are to be evaluated by the panellists and, once finalised, their proposal will be presented to the Baltic Index Council for approval and trial phase. 

The exchange said that rising imports by India, China, Pakistan and Egypt has led to a fundamental change in LNG shipping market dynamics, adding that more contracts are being signed for shorter durations and smaller quantities, without fixed destinations. "Trade patterns have diversified as new import and export terminals have been built and the LNG fleet continues to expand," its statement added.

Founded 1744, the Baltic Exchange was sold by its 640 members in November 2016 to Singapore Exchange (SGX), which is already involved in developing new spot LNG commodity pricing indices, principally the SLing index.  The Baltic Exchange subsequently considered the idea of developing a LNG shipping rate index in April 2017.

"We are delighted that four of the most important independent LNG shipbroking companies have joined our panel and we look forward to developing a set of standardised assessments for use across the fast-growing LNG industry," said Baltic Exchange CEO Mark Jackson.