TRADING STATISTICS: Volumes remain strong - US$ 808 million traded in February

Trading statistics summary - February 2007:

Activity split – February 2007:

CEO's view point: “Volumes in the Freight futures market are looking good for the first quarter of this year, and I am pleased to see we are keeping up. With nearly 1000 tanker transactions done in February, and both fuel oil and dry bulk doing well, we are already at par with the trading volumes done for the entire first quarter of last year,” says IMAREX NOS’ Chief Executive, Tom Even Mortensen.

Tanker derivatives:

A total of 938 trades (894 trades in January) were concluded by members and OTC clients, up 180 % on the 335 trades concluded in the same period last year.

A total of 14 427 lots in tanker futures (14.4 million tons) were traded via IMAREX, up 137 % compared to the 6 065 lots traded in the same period last year. The notional value of tanker transactions at IMAREX was US$ 256 million (US$236 million in January), up 172 % from US$94 million in the same period last year.

Market review:

The prompt spot market for Very Large Crude Carriers on the AG to Japan route (TD3 - VLCC carrying 260 000 tons of crude from Saudi to Japan) finally took off during the last half of February, pushing the price of the MAR07 contract up by 21% from WS60 to WS72.5 at the end of the first week of March. A total of 4 million tons were traded on TD3 during February, equivalent to 15 full cargoes. This compares to 105 physical VLCC fixtures concluded in the same period.

A continuing draw down in US distillate petroleum stocks and the anticipation of lower domestic production because of refinery maintenance coming up, has caused freight futures on the transatlantic TC2 clean route (37 000 tons Rotterdam to New York) to rise by over 50 % during February. Nigerian elections, involving promises of gasoline and diesel to voters, has created short term demand for European product being shipped into West Africa. This too has helped push up the price of short term TC2. A total of 4 million tons of TC2 was traded via IMAREX and NOS during February – equivalent to 108 physical cargoes.

The Asian clean petroleum product trades traded on TC4 and TC5 (Medium Range Singapore to Japan and Large Rrange 1 from AG to Japan) have not seen the same rate hikes as in the Atlantic, and the spread between TC2 and TC4 (Atlantic against Pacific) has widened to WS 145 points in the spot market and WS75 points on the MAR07 contracts.

Dry bulk derivatives:

Combined dry bulk volumes cleared at NOS and traded at IMAREX was 9 462 lots (where 1 lot is 1 day of time charter or 1000 metric tons of freight), up 112% from the 4 459 lots traded in February 2006. The notional value of contracts traded was US$321 million, three times the value of the same period last year.

A total of 178 dry bulk derivatives transactions in February compares to 156 in January of 2007 and 81 transactions in the same period last year.

Market review:

The Panamax dry bulk market continued its run on prices during February largely fuelled by strong Chinese and Indian demand for iron ore and coal from Australia and Indonesia.

Prompt spot rates rose 20% or US$6 250 per day during the period, pulling the price of the Q207 contract up during the first half of the month, then being dragged up further by the same contract in the second half. A total of 6 500 future days of time charter was traded at IMAREX and NOS during February, equivalent to 18 full years of Panamax ocean transportation.

Bunker fuel oil derivatives:

The total number of fuel oil derivative transactions in February was 52. Volumes rose to reach 820 000 tons (760 000 tons in January), up 92 % compared to February 2006. The total notional value of bunker fuel oil contracts traded at IMAREX and NOS in February rose 28 % to US$189 million, up from US$ 130 million in the same month last year.

Market review:

February was the month when spot fuel oil prices traded at a premium to the front month futures – a state known as backwardation, when the future price of oil is LOWER than the prompt cash price for the same oil. This happenend in February for the first time in several years. The Rotterdam wholesale (barge) market, saw the price of 3.5% High Sulphur Fuel Oil (HSFO) see-saw between US$237 and back up to US$262 per ton – creating perfect conditions for traders who rely on market volatility to make a profit. The forward curve is now pricing CAL08 fuel oil at around US$305 per ton.

Freight options:

IMAREX is the only market place in the world where cleared freight options are traded, and NOS is the only clearing house which clears freight options.

In February, a total of 42 IMAREX freight options accounting for 2 008 lots (2 043 in January) with a notional trade value of US$42 million were traded (US$57 million in January). Freight options accounted for 8 % of all contracts traded at IMAREX NOS, and 5 % of the notional value traded at the exchange.

New trading and clearing members:

IMAREX and NOS were pleased to welcome three new members in February:

• Spar Shipholding AS
• Enel Trade SpA
• A/S Global Risk Management Ltd

The total number of trading and clearing members at IMAREX and NOS is: 162

For more information, please contact:

• Tom Even Mortensen, Chief Executive Officer Tel: +47 2389 4222
• Arild Jæger, Chief Financial Officer Tel: +47 2389 4211

Please see the full report below:

• IMAREX and NOS freight and Fuel oil volumes Feb 07

  IMAREX_FEB07_FINAL_MB.pdf 200.77 kB