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Originating department:Commercial Services
Company Circular No:LCH.Clearnet Ltd Circular No 3059
Service Circular No:LCH EnClear No 350
Date:11 January 2012
To:All LCH.Clearnet EnClear Clearing Members

Launch of new $/tonne wet freight contracts

LCH.Clearnet has introduced two new contracts to its OTC Freight (FFA) clearing service. The TD19 and TC6 wet freight routes are now also 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 TD19 and TC6 contracts
  2. The LCH.Clearnet registration fee for the TD19 and TC6 contracts will be $4/lot
  3. The contract codes will be D19 (TD19) and DC6 (TC6)
  4. The $/tonne contracts will be margined as future style contracts – daily variation margin and p+l.

Members are asked to note that:

All trades are entered with a $/t value, whether they are WS or $/t contracts

It is important therefore that trades are entered under the correct code for clearing.

The $/t contracts will NOT be revalued in Jan 2013.
These contract codes all start  with ‘D’.

The WS contracts will be revalued in Jan 2013 with the new flat rate if they are for forward years. These contract codes all start with ‘T’.

The LCH clearing codes for the contracts are: 

Baltic RouteWS$/MT


$ 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 TC6 (DC6) (30,000 mt Algeria/Euromed)
Baltic TD3 (DD3) (260,000 mt ME Gulf – Japan)
Baltic TD5 (DD5) (130,000 mt W Africa – USAC)
Baltic TD7 (DD7) (80,000 mt North Sea – Cont)
Baltic TD19 (D19) (80,000 mt Cross Med)

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 24th December, or previous business day, where the 24th 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 me on [email protected] or +44 20 7426 7460.

Yours sincerely

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