THE Shanghai Shipping Exchange will initiate China’s first dry bulk and oil import indices on Wednesday, tracking bulker and tanker trades to the world’s largest consumer of commodities.
SSE president Zhang Ye said in an interview with Reuters last Friday that the dry bulk index was not aimed at competing with the Baltic Dry Index, the world benchmark for dry bulk rates. Mr Zhang said that the index will be aimed at users in China.
“We hope to provide an index that focuses on China’s market, which is very important to us. We didn’t have our own index in the past, while BDI can reflect the overall trade market,” he told Reuters.
Plans for the indices have been in works since 2011, when the SSE first announced that it would launch them in the first half of the year and introduce derivatives trading based on the indices.
The SSE said in December 2011 that the indices will track shipments on the most heavily trafficked commodity trade lanes to China, those from the Middle East, Australia and Brazil to China.
The SSE launched a dry bulk index late last year covering domestic coal-shipping rates. Derivatives trading based on the SSE’s Shanghai Containerized Freight Index began in mid-2011 and has proved enormously popular.