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Wednesday, December 13, 2017

Member’s lunchtime presentation on FFAs

A members’ lunchtime seminar on forward freight contracts (FFAs) was held this week in INTERTANKO’s London office and more than 15 senior executives participated.

James Tweed of Azimuth Marine Management Ltd., and Jeremy Penn, Chief Executive of the Baltic Exchange, updated INTERTANKO members on some of the developments in the FFA market, and how the market can be of use to INTERTANKO members.  An overview of the current estimates of the size of the market as well as the types of market participants were also highlighted.

According to Tweed, the derivative market is significant as it is growing rapidly and all the indications are that within the next 18-24 months the volumes of trade of FFAs will exceed the volumes of the underlying physical market. 

He equates this growth to a real interest from charterers and owners alike, and sees it as one of the factors that has led to the growth in the number of brokers offering FFA broking desks. Chartering brokers are under increasing pressure from their clients to be aware of the derivative markets.

Tweed is currently a director of Azimuth Marine Management Ltd, a hedge fund created specifically for the purpose of trading FFA’s and offering investors a point of access to the freight derivative markets.

ContactMinerva R. Alfonso