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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.
- All Clearing Members already active on the FFA service will automatically have access to the new TD19 and TC6 contracts
- The LCH.Clearnet registration fee for the TD19 and TC6 contracts will be $4/lot
- The contract codes will be D19 (TD19) and DC6 (TC6)
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 Route | WS | $/MT |
| TD3 | TD3 | DD3 |
| TD5 | TD5 | DD5 |
| TD7 | TD7 | DD7 |
| TD19 | T19 | D19 |
| TC2 | TC2 | DC2 |
| TC6 | TC6 | DC6 |
| $ per Tonne Tanker Routes | |
| Description | Cash settled $/t freight forward contracts on the following Tanker Voyage Routes: Baltic TC2 (DC2) (37,000 mt Continent – USAC)
|
| Lot size | 1,000 mt |
| Pricing | US $/ton |
| Minimum tick | US $ 0.0001 to account for final settlement |
| Fixed price | The 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 series | Front 6 Months, Front 5 Quarters, Front 2 Whole Calendar Years. Out to a maximum of 35 months |
| Final payment | The first business day following the expiry day |
| Business days | UK 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