FFAs can bring balance sheet stability. That is the message from the new chairman of the Tanker FFA Brokers Association, Pat Donelly.
The Braemar ACM-GFI broker was elected yesterday to take over from Ben Courtney of ICAP Energy to chair the association, which represents the worldwide community of tanker Forward Freight Agreement (FFA) brokers.
Working with the Baltic Exchange, the group organises educational workshops and industry forums in major shipping centres, with the aim of promoting FFAs as an important tool for managing exposure to freight rates.
On taking the new role, Donnelly said: “FFAs are increasingly recognised as an essential tool for managing exposure to freight rates. When we talk about risk in a derivatives context, we are referring to physical market risk in volatile markets, faced by even the most conservative companies. FFAs provide a flexible mechanism for managing this exposure, bringing balance sheet stability when used effectively and complimenting physical market activities.”
Donnelly said prospects for tankers were “exciting yet challenging”.
Donnelly joined Braemar ACM-GFI in 2012, where he focuses on tanker FFAs. He has also previously been active as a broker for LPG, fuel oil and dry FFAs.