13-10-2018

First Platts-linked VLCC FFA on USGC-China route traded

The first Platts-linked Forward Freight Agreement or freight future on the dirty tanker VLCC 270,000-mt US Gulf Coast-China route was traded.

The November 2018 futures contract traded at $26.2963/mt for five lots or 5,000 mt, the equivalent of lump sum $7.1 million on a 270,000 mt cargo basis. The deal was cleared on Intercontinental Exchange Thursday.
The Platts VLCC 270,000 mt USGC-China dirty tanker assessment is listed on ICE, under code WDD, and was effective from September 17. The final settlement for the monthly contract is based on the average Platts assessments for the corresponding month.

Freight for VLCCs carrying dirty cargoes from the USGC to China on the spot market has been soaring over the past two weeks, with freight for the route last assessed Wednesday at lump sum $7.3 million, $1.9 million or 35% higher than September 27, the day before rates jumped nearly $800,000 in one day. A combination of a firm global VLCC market as well as strong export interest from the US Gulf Coast have contributed to the overall bullishness in rates, sources close to the market have said.

Source: Platts

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