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Originating department:Commercial Services
Company Circular No:LCH.Clearnet Ltd Circular No 2714
 Service Circular No:LCH EnClear No 312
Date:05 November 2010
To:All LCH.Clearnet EnClear Clearing Members

Launch of new $/tonne wet freight contract

LCH.Clearnet will be introducing a new contract to its OTC Freight (FFA) clearing service on Monday 08 November 2010.  In addition to the TC2 and TD3 routes, the TD5 wet freight route will now also be tradeable as a fixed $/tonne contract.   This contract will be separate to the existing floating Worldscale rate contract.

1. All clearing members already active on the FFA service will automatically have access to the new TD5 contract.
2. The LCH.Clearnet registration fee for the new TD5 contract will be $4/lot.
3. The contract code will be DD5.
4. The $/tonne contract will be margined as a futures style contract - daily variation margin and P&L.

$ per tonne tanker routes

Cash settled $/t freight forward contract on the following tanker voyage route:

Baltic TD5 (DD5) (130,000mt W Africa USAC)

Lot size1,000 mt
PricingUS $/tonne
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 Holly Shaw on Holly.Shaw@lchclearnet.com or +44 20 7426 7027.

Yours sincerely

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