London Dry Bulk Announces Deutsche Bank Has Taken An Equity Stake In Its Brokerage

Deutsche Bank has taken an equity stake in London Dry Bulk (LDB), the world’s first specialist physical and financial iron ore broker. The combination of LDB’s extensive management experience in physical coal markets and Deutsche Bank’s expertise as co-founder of the financial iron ore swap will help LDB develop the iron ore spot and derivative market. Deutsche Bank will be represented at Board level within LDB while LDB remains independent.

LDB are showing active markets on physical and financial iron ore products for FOB (non-origin specific) and CIF China. Deutsche Bank will provide liquidity to the trading platform, which in turn will enable the iron and steel industry effective price risk management for the first time.

LDB is facilitating the establishment of a seaborne physical prompt market in iron ore on a fixed price and index price basis. The brokerage allows for physical iron ore cargos contracted between iron and steel industry participants to be matched with financially settled swap contracts. In the case of index linked trades, while the physical cargo remains contracted between traditional counterparties the price can be fixed through swap contracts with an independent third party.

“LDB draws on the combined experience of the coal team at London Commodity Brokers (LCB), a leading physical coal brokerage formed in 2005.” said Clive Murray, who is the Managing Director of LDB and the founder of LCB

“We see parallels in the development of the iron ore market today compared to the physical coal market fives years ago. We believe our experience in bulk commodities broking puts us in a unique position to offer a service to the iron ore industry that will provide more transparency, liquidity and risk management tools,” he said.

“The iron ore market is experiencing huge changes. We are witnessing a breakdown of the benchmark process and a significant switch to the spot market for transacting business. For our iron ore financial swap to be successful, we believe that it is essential to have experienced commodity brokers to enhance market liquidity and transparency,” said Ray Key, Deutsche Bank’s Global Head of Metals Trading. “LDB, Deutsche Bank, and other market intermediaries are part of the iron ore market evolution”.

LDB and has employees based in Hong Kong , China , India and London.