Â
>>REAL-TIME UPDATES IN THE WIRE. CLICK HERE<<<
Â
Â
China’s most-trade containerized freight index (Europe Service) futures contract on the Shanghai International Energy Exchange, for April delivery, surged by nearly 17.5% on the first day trading.Â
The contracts for delivery in 2024 June, August, October and December surged by the daily limit of 20%.Â
The futures, the first shipping futures product in China, reflect freight rates for containers shipped from Shanghai to ports in Europe, which is aimed at helping companies hedge against risks in fluctuating container freight prices.Â
Denominated and settled in the Chinese yuan, the newly introduced futures contract is open to investors all over the world.
The Shanghai (Export) Containerized Freight Index based on settled rates, or the SCFIS, which is updated by the Shanghai Shipping Exchange every Monday, is the underlying asset of the newly launched futures contract. The SCFIS tracks the average level of spot-market, post-departure settled rates for containerships traveling from Shanghai to Europe.
In all, 369,000 lots of the main contract were traded on Friday, with their value reaching 16.56 billion yuan ($2.27 billion). After opening at 770 points, the main contract closed at 916.3 points.
Fang Xinghai, vice-chairman of the China Securities Regulatory Commission, the country’s top securities watchdog, said at the launch ceremony on Friday that the Containerized Freight Index (Europe Service) futures is one of the most innovative products introduced in the Chinese futures market in the past few years. The new product’s stable launch and operation will help advance the Chinese futures market’s opening-up and promote further product innovation.
The new futures contract will enrich Chinese shipping companies’ risk management tools. This is significant because demand for such tools has grown over the past few years amid higher freight rates volatility, said Tian Xiangyang, chairman of the Shanghai Futures Exchange, the parent of the Shanghai International Energy Exchange.
Given the large size of the Chinese shipping industry, the new futures will also help increase China’s influence in terms of pricing in international transportation, said Tian.
