ICE sees strong interest in LNG freight futures
The first trading day for new LNG freight futures contracts for US deliveries saw client interest from major trading houses such as Gunvor and Vitol, the Intercontinental Exchange (ICE) said March 23.
ICE said trading for LNG freight futures opened March 22 for new contracts based on price assessments from Spark Commodities.
The Spark255 contract covers LNG freight futures from the US Pacific Northwest to Tianjin in northern China. The Spark306 contract covers deliveries of LNG from the Sabine Pass terminal in Louisiana to the Gate terminal in Rotterdam.
The first trading day saw 30 lots split evenly across both contracts with a June 2021 expiry. Participants in the first tranche included French supermajor Total along with trading houses Glencore, Gunvor and Vitol.
ICE said the new contracts allow traders to asses the price risk associated with the various shipping lanes covered by the Spark assessments.
“We have had such a positive and supportive response from the market since we announced these contracts together with Spark,” Gordon Bennett, the managing director of utility markets at ICE, said. “The trades on the first day demonstrate the key role they will play in allowing participants to now manage freight risk alongside the commodity risk and therefore optimize their global natural gas portfolios.”