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China's first imported container freight index officially launched


Dec 19 2015

After a year of trial operation, the Shanghai Shipping Exchange announced on November 30 that its developed container freight index (“CICFI”) was officially operational. This is the first domestic container freight index.

The index provides a comprehensive index and five sub-route indexes, which are Europe, Mediterranean, West America, East America, Australia and New Zealand routes. The base period of the index is November 28, 2014, which started trial operation. The base period index is 1000 points. At present, the freight information required for compiling the index is provided by 10 Chinese and foreign shipping companies that operate the above routes and have a large market share. The first sample routes and companies may change after the editorial board meeting.

Zhang Ye, president of the Shanghai Shipping Exchange, said: The import container freight index was launched against the backdrop of changes in China's trade structure. China currently has a market for imported containers, and the accumulated data can already be used to compile indexes. The change in trade structure has brought new opportunities to shipping companies. Strengthening the international distribution of goods is beneficial to the future development of Chinese shipping companies.

For a long time, China's export container volume is far greater than the import container volume, but with the adjustment and upgrading of China's industrial structure, the export-oriented foreign trade market structure is also changing.

Liu Jun, deputy editor-in-chief of Shanghai Shipping Exchange's Shipping Trading Bulletin, explained to Caixin reporter that China's foreign trade is currently weak, and container exports and imports are showing a more balanced trend. For shipping companies, if they can use imported empty containers to load imported products after the goods have been delivered, it can effectively reduce costs and improve efficiency, so it has also pushed shipping companies to increase their efforts to acquire cargo.

In 1998, the Shanghai Shipping Exchange launched the China Export Container Freight Index (“CCFI”) for the first time, releasing freight data to provide decision-making references for parties to the transaction, including shipping companies, cargo owners, financial institutions and other participants.

Liu Jun said that the long-term experience in compiling the export container freight index has also helped launch the imported container freight index. The increase in the volume of imported containers will make the freight index more representative, and the index can also provide a reference for the company's operating decisions .

Simultaneously with the import container freight index, there are two central counterparty clearing services for over-the-counter derivatives: RMB container swaps and China coal forward freight agreements. This is a key business launched by Shanghai Shipping Exchange and Shanghai Clearing House. The two products are calculated based on the Shanghai export to Europe, US-West container routes and Shanghai Qinhuangdao-Shanghai, Guangzhou coal routes issued by the Shanghai Shipping Exchange.

Zhang Lei, general manager of Shanghai Clearing House's innovation business department, introduced at the forum that Shanghai Clearing House hopes to foster institutional investors' derivatives markets for commodities and create conditions for shipping companies to control risks. The two products launched this time are also actively deploying commodity derivatives.

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