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ISSUE 47 PAGE 21

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stronghold
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transport

pricing

The Baltic Exchange has been benchmarking prices of
seagoing vessels and cargoes since the mid-1980s.
Jon White learns why it set up shop in Singapore, and the
services it launched for clients in this part of the world

The Baltic Exchange can trace its roots all the way TIES WITH ASIA

back to 1744, in a London coffee house where In 2016, shareholders of the privately owned Baltic
merchants and shipowners regularly gathered. It Exchange approved its acquisition by the Singapore
started out by providing pricing benchmarks for Exchange (SGX), which operates securities and
dry cargo in 1985 and has, over the years, added derivatives markets in Singapore. Ms Lu observes
benchmarks covering tankers, containers, liquefi ed that this SGX connection and the setting up of a
natural gas (LNG), and liquefi ed petroleum gas (LPG). new base in Singapore have brought the venerable
“Our benchmarks are derived from assessments institution closer than ever to the shipping and
provided by independent panels of shipbrokers trading community in Asia.
located in major shipping centres around the world,” “Singapore commands a strategic position as
reveals Ms Lu Su Ling, Head of Baltic Exchange Asia. a leading maritime hub in the regional and global
She adds that the Baltic Exchange, headquartered arena,” she shares. “It is also the region’s premier
in London, was also recently authorised commodity trading hub. Many international and
as a benchmark administrator by regional companies in both sectors have a signifi cant
the Financial Conduct Authority presence in Singapore, and their key decision makers
in the UK, thus validating the are based here or visit frequently.”
robustness and transparency Ms Lu says that having a presence in Singapore has
of its index production led to a senior freight market assessor being appointed
methodology and process. here to cover the reporting of Capesize routes. “This is
Today, the Baltic Exchange the first time in Baltic’s history that someone in this role

provides benchmarks for is sitting outside London.” More importantly, being in
more than 70 routes globally, Singapore has opened new doors, with Baltic benefi ting
including those for ship sale from increased visibility in Asia. For instance, Ms Lu
and purchase transactions, ship shares that, while Asian members made up 20% of
recycling, ship operating expenses, as Baltic’s membership base, 30% of new members each
Ms Lu Su Ling well as forward assessments. year since 2016 have been Asian. She also observes that