The Baltic Exchange has announced that its Multilateral Trading Facility for dry freight derivatives, Baltex, is set to go live on June 8, 2011. The announcement was made following a discussion with the Freight Market Information Users' Group which met in London.


Addressing a launch event attended by leading freight traders, brokers, shipowners and charterers, Baltic Exchange chairman Mark Jackson said, 'This is the moment in time when responsibility for the success of the system is to a large degree handed from us to you. It is what you all do now which will decide how quickly the system is successful.'

The Baltic Exchange Chairman called on companies supporting Baltex to ensure that their paperwork was finalised, ensure that open lines of credit to clearing were set up and, once trading, for companies to enter realistic prices on the system.


The meeting also heard that Baltex had been authorized by the Swiss financial authorities (FINMA) as well as the UK's Financial Services Authority. The system will be available to trade in Singapore from launch and Baltic Exchange Derivatives Trading is pursuing an application with the Hong Kong Securities & Futures Commission.


Underpinned by the highest supervisory and compliance standards and the Baltic Exchange brand, as well as a high level of support from the market, the launch of Baltex marks a step change in the way in which freight derivatives are traded.' The trading system presents a unique opportunity for all freight derivatives stakeholders to benefit from better execution, reduced market impact and more efficient transmission to clearing. It has also been designed to attract new financial and commodity-orientated participants who prefer to trade in a regulated environment.

Baltex users will be able to trade the following routes:

Dry Bulk Voyage FFAs

  • C3 ' Capesize Tubarao ' Qingdao
  • C4 ' Capesize Richards Bay ' Rotterdam
  • C5 ' Capesize W. Australia ' Qingdao
  • C7 ' Capesize Bolivar ' Rotterdam

Dry Bulk Timecharter Trip FFAs
  • P1A ' Panamax Transatlantic RV
  • P2A ' Panamax Skaw-Gib/Far East
  • P3A ' Panamax Japan-SK/Pacific RV
  • S7 ' Supramax East Coast India ' China

Dry Bulk Time Charter Average FFAs
  • Capesize TC Average
  • Panamax TC Average
  • Supramax TC Average
  • Handysize TC Average


Baltex has been developed by the Baltic Exchange, the world's only independent provider of daily bulk shipping indices and route assessments, over the past two years. 'The trading system itself is run by Baltic Exchange Derivatives Trading Ltd, a subsidiary of the Baltic Exchange. Baltex is based on technology developed by Elysian Systems.

The screen provides live FFA prices and will support straight through processing to the international clearing houses CME, LCH, NOS and SGX. The transaction's clearing status is displayed in real time.


Baltex can be used by both brokers and principals and has been developed in close collaboration with the market. All live prices can be seen by Baltex screen members, but the trader's identity is kept anonymous to all except the nominated broker. As well as a live trading screen, a view only option will be available to those who simply want to see the depth of the market. This view only mode will also be made available through quote vendors.


Baltex is designed to be an easy to use tool for freight derivative traders. It incorporates a fully bespoke screen layout, built-in warnings and functionality which can be tailored to traders' needs as well as an Application Programming Interface (API) which can be used to interface into in-house systems. Baltex is closely monitored by a compliance team in London.