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At a meeting (Wednesday 14 January) of the Baltic's Freight Indices and Futures Committee (FIFC), Baltic Exchange directors agreed to extend the index's lifetime to meet concerns of Forward Freight Agreement (FFA) traders who have already agreed contracts into 2005.
FIFC chairman Michael McClure said:
"Following substantial consultation with the industry as to the possible introduction of a Supramax Index (BSI), it is clear that we need to continue to publish the BHMI. Trading of handymax FFAs has boomed since the Baltic's initial BSI consultations in the summer of 2003. However, the larger class 52,000 + dwt vessel will become the dominant rate setting size and the current BHMI description based on assessments of a 45,500 dwt ship will soon diverge from the most visible type trading."
He added:
"We still aim to introduce the Baltic Supramax Index (BSI) as soon as possible, but this index will not contribute to the Baltic Dry Index (BDI) until the BHMI ceases publication. We will also review the component routes of the BHMI as a matter of priority."
Baltic director Basil Mavroleon of Bray Shipping will head a sub-committee of the FIFC to discuss precise specification with the BSI. The sub-committee will include representation from the Baltic's Dry Cargo User's group, the Forward Freight Agreement Brokers' Association (FFABA) and panellists.
In a separate move the Baltic Exchange will also be reviewing its tanker market routes. Another FIFC sub-committee will be established under Baltic directors Mike Brown (Simpson Spence & Young) and Dennis Petropoulos (Braemar Seascope).
The sub-committee will include representation from the Baltic's Tanker User's group, the FFABA and panellists.
Currently, the Baltic Exchange produces daily Worldscale assessments for 16 of the world's most important tanker routes in the Baltic International Tanker Routes assessments (BITR).
