January volumes on Imarex: Tankers up 41% - Drybulk up 31%

The number of tanker futures transactions during January 2005 rose 91% compared to December 2004, to reach 573 deals. The combined number of tanker futures transactions during November and December 2004, was 690.

All tanker futures contracts traded on and via Imarex are cleared by The Norwegian Futures and Options Clearinghouse (NOS). Last month Imarex invested in NOS partly to help boost its clearing capital to NOK 400 million, with further NOK 250 million in guarantees being put in place. Total funds available to NOS will therefore be over US$100 million. The increased capital is being put in place to meet the substantial growth which is expected in the cleared sector of the freight derivatives market.

The growth in transactions is matched by the growth in the number of lots traded. Total tanker lots traded (1 lot = 1000 tonnes of freight) rose 41% to 18190 compared to December 2004, moving the average number of lots per transaction up to 32 – or 32,000 metric tonnes of freight.

January volumes compared favourably to the average monthly volumes in the fourth quarter of 2004. Q4 monthly average transaction volumes were 468 per month with 18 547 lots.

A weaker physical market meant that freight rates fell during the period, making the nominal trade value of transactions done during January, proportionally lower than what they could have been with the same volume during November and December. Total nominal trade value of tanker futures traded on Imarex in January was US$ 264,6 million.

The average value of each transaction was just below US$462,000 per trade.

Volumes in lots of Drybulk freight futures traded on Imarex rose 31% to 4607, boosting the nominal trade value of deals by US$21,8 million to US$ 125,1 million for January.

Drybulk lots traded via Imarex rose 9,7% compared to the average monthly volumes on the fourth quarter of 2004.

“This demonstrates clearly the continued growth in the cleared drybulk futures market,” says Preben Richter, head of the Imarex Drybulk desk in Oslo, adding: “We see more and more principals making use of clearing when trading in this market.”

Imarex and NOS’ expect the freight derivatives market to grow substantially over the next few years. The strengthened capital base was established to enable Imarex as a market and NOS as its central clearing partner, to deliver results as the market multiplies.

"Our job is to provide the most efficient market for paper-freight. An important part of this is to work with NOS to provide total security in clearing and the most cost effective clearing solution," says Tom Mortensen, Imarex Managing Director. "Principals can see that this is what we have done," he adds.

Mortensen adds that Imarex' ambition is not just to meet the capital requirements of this market, but also to bring new members and trading products to market.

"Through 2005 we expect to see a number of significant new members of the exchange from the shipping, commodity and investor sectors of the market, as well as the launch of several new futures products, which all members can trade directly on our screen,” he says.