Alternatives to the freight rate information provided by the Baltic Exchange are cropping up, helping explain the London institution’s recent diversification into new fields.
S&P Global Platts has become the latest to chip away at territory that used to be the sole purview of the Baltic, launching a capesize earnings index. The CapeT4 Index reflects ton-mile demand on four key time charter equivalent (TCE) assessments.
“The existing approach to pricing dry bulk freight has remained essentially unchanged for 35 years. The shipping industry deserves better. We believe the combination of Platts’ robust and transparent methodology and observed trade flow data from Platts cFlow will allow us to publish an index that better reflect the supply and demand fundamentals of the shipping market,” said Peter Norfolk, global head of shipping for S&P Global Platts.
The capesize market currently lacks a weighted average TCE index. The Platts CapeT4 Index is based on trade flow volume and captures the movement of widely consumed commodities, such as iron ore and coal, to highlight physical spot market trading activity.
The CapeT4 Index is calculated by applying an allocated weighting to the daily TCE ($/day) assessments of four key round voyages, published at the 5:30pm Singapore time. The routes are north China – Australia round voyage, north China – South Africa round voyage, north China – Atlantic round voyage and the transatlantic round voyage.
Bought by the Singapore Exchange in 2016, the Baltic Exchange has recently started offering new services as others moved into its old business domain. Among new initiatives, the Baltic is starting to track shipping emissions.