LCH.Clearnet’s Cleared Freight Volumes Rise on Commodities Demand from China

Cleared commodities freight volumes reach record levels since the peak in 2008

16 October 2013

LCH.Clearnet Limited (LCH.Clearnet) announced that cleared freight volumes more than doubled* in September from a year earlier as traders increased their hedged positions to mitigate their exposure to freight prices. Rising iron ore imports by China and declining availability of shipping in the Atlantic Basin, which was due to an increase in transatlantic shipments, pushed freight prices to three year highs.

Alberto Pravettoni, CEO of LCH.Clearnet’s Repo and Exchanges business, which includes the freight clearing business, said: “Global chartering companies, ship owners and trading companies are increasingly looking to manage their risk through cleared trading opportunities. The surge in cleared freight volumes in September, which was driven by strong demand from China and a shortage of available shipping routes, is evidence of our clients’ strong demand for our world-class risk management services.”

The volumes recorded in September are the second highest since LCH.Clearnet’s Freight Service was launched in 2005. The Freight Service has a 70% market share of dry freight volumes.

LCH.Clearnet’s Freight Service provides an independent clearing service for OTC Forward Freight Agreements (FFAs) for the most actively traded routes; thirteen dry and ten wet routes, as well as options on the four dry timecharter routes; Capesize, Panamax, Supramax and Handysize.

Approved Brokers have open and equal access to the service and can register their OTC brokered trades with LCH.Clearnet for clearing through a clearing member of LCH.Clearnet.

The service was launched with the support of the freight broking community. LCH.Clearnet works closely with the industry to ensure that the offering reflects the ongoing needs of the marketplace. For more information on LCH.Clearnet’s Freight Service visit www.lchclearnet.com/freight/ffas/products.asp.

*144,536 lots were cleared in September 2013 which represents a 126% increase on the average monthly lots cleared during 2013.

Contact: Kamyar Naficy +44 (0) 20 7426 3787

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About LCH.Clearnet

The LCH.Clearnet Group is a leading multi-asset class and multi-national clearing house, serving major exchanges and platforms as well as a range of OTC markets.

LCH.Clearnet’s world-class risk management framework provides exceptional levels of protection to international markets, as has been proven through the management of recent defaults. As demand for robust clearing services continues to grow, LCH.Clearnet is committed to achieving the highest standards of risk management across all asset classes cleared.

LCH.Clearnet is majority owned by London Stock Exchange Group (LSE.L), a diversified international exchange group that sits at the heart of the world's financial community. For more information on LCH.Clearnet visit www.lchclearnet.com/media_centre.