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Pulp gets the paper market treatment from FIS

London-based Freight Investor Services (FIS) has set up a pulp futures desk, seeing similarities with the iron ore paper trades 20 years ago.

The global pulp production market equates to some 176m tonnes a year, with some 52m tonnes being shipped across the globe, some 25m being imported by China alone.

“Much like the nascent iron ore market in the 2000s, the current paper market had traditionally been longer term contracts which has moved more recently towards more spot business. This spot business therefore requires the ability to hedge exposure, and the time is ripe for developing the futures market,” FIS stated in a release.

John Banaszkiewicz, CEO of FIS, said:“We are pleased to be able to partner with NOREXECO on pulp futures and to drive forward development of the only real paper market. There is already a well-established market onshore in China, but we hope to help develop this globally, helping to grow the offshore, as well as the onshore market.”

The iron ore market has now grown to a yearly physical volume of 1.56bn tonnes, with a partnering iron ore futures market 18.5 times bigger at 29bn tonnes. For the pulp market 400m tonnes was traded on the paper futures market on the Chinese domestic market last year, just over twice as big as the physical market.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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