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Originating department:Commercial Services
Company Circular No:LCH.Clearnet Ltd Circular No 2650
 Service Circular No: LCH EnClear No 293
Date:08 July 2010
To:All LCH.Clearnet EnClear Clearing Members

Launch of new $/tonne wet freight contracts

LCH.Clearnet will be introducing two new contracts to its OTC Freight (FFA) clearing service on Monday 12 July 2010.  The TD3 and TC2 wet freight routes will now also be tradeable as fixed $/tonne contracts.   These contracts will be separate to the existing floating Worldscale rate contracts.

1. All Clearing Members already active on the FFA service will automatically have access to the new TD3 and TC2 contracts.
2. The LCH.Clearnet registration fee for the TD3 contract will be $4/lot, and for the TC2 contract it will be $5/lot.
3. The contract codes will be DD3 (TD3) and DC2 (TC2). 
4. The $/tonne contracts will be margined as future style contracts - daily variation margin and P&L. 

$ per tonne tanker routes

Cash settled $/t freight forward contracts on the following tanker voyage routes:

Baltic TC2 (DC2) (37,000 mt Continent - USAC)

Baltic TD3 (DD3) (260,000 mt ME Gulf - Japan)

Lot size1,000 mt
PricingUS $/ton
Minimum tickUS $0.0001 to account for final settlement
Fixed priceThe traded price (in $/t) or the previous day's settlement price as supplied end of day by the Baltic Exchange
Floating price

In respect of daily settlement, the floating price is the end of day price (in $/t) as supplied by the Baltic Exchange.

In respect of final settlement, the floating price is the mean of the Baltic Exchange WS rate spot price/100 multiplied by the Flat Rate for each pricing date in the settlement period.

Last trading day

At 18:00 hours UK time on last business day of each month within the contract series.

Exception - December contracts will expire on the 24 December, or previous business day, where the 24 December is a non-working day.

Contract seriesFront 6 Months, Front 5 Quarters, Front 2 Whole Calendar Years. Out to a maximum of 35 months.
Final paymentThe first business day following the expiry day
Business daysUK business days


If you have any questions relating to this circular, please do not hesitate to contact Isabella Kurek-Smith on Isabella.Kurek-Smith@lchclearnet.com or +44 20 7426 7460.


Yours sincerely


Isabella Kurek-Smith
Director, Head of Energy and Freight Markets
Commercial Services