FIS News

Sales and marketing specialist to assist in development of new sources of liquidity in fast-growing derivatives sector.

Freight Investor Services, one of the world's leading brokers of freight and commodity swaps, is pleased to announce it has brokered its first coking coal swap trade. The deal was for 9,000 tonnes of Platts Premium Low Vol coking coal for the Q1 2012 period, priced at $245 per tonne, with clearing at CME. FIS broker Arne Petter Kolderup brokered the swap, which involved Credit Suisse as a counterparty.

FIS has attempted to understand and interpret the dry freight market's late summer bull-run by looking at fundamentals, price and past behaviours which help to predict the future, rather than merely relating recent history.

Its latest report made the following key conclusions:

• Cape Cal 12 volatility is at its recent highs, bearish divergence indicates market is looking overbought. Underlying markets in the front quarters and the deferred are reaching resistance levels.

• Long Cal 12 vol positions could be reduced as time and price at this point are reaching their conclusions and short Cal 12 vol positions could buy back in the dips over the coming four weeks or roll out into higher strikes. From a technical perspective we see reasons to reduce long volatility positions as the aggression in this move looks to be ending.

Click below to download the full report. To contact the FIS options team please click here.

Freight Investor Services, one of the leading brokers of freight and commodity derivatives, has welcomed the decision by index provider The Steel Index (TSI) to begin daily publication of its Turkish Export Scrap index.

TSI increased the publication frequency of its Turkish imports HMS #1&2 80:20 scrap reference price from weekly to daily from September 1, in response to industry demand for more frequent scrap price information.

No-one is expecting fireworks in the dry bulk market this year. In fact, the prognosis is for depressed freight rates in all three sectors into 2012, unless the recent surge in scrapping is maintained.

But shipowners and charterers need not assume that a depressed market means that earnings potential is similarly downbeat. The robustness of the underlying dry FFA market provides the opportunity for trading options in a way that is tuned to the current physical picture.

A report on the Steel Scrap Trade compiled by Freight Investor Services with support from The Steel Index (TSI) offers traders in physical and derivatives markets a unique insight into this complex and under-reported commodity.

Its reputation as a complex and opaque commodity means scrap has not historically attracted many new market entrants. However, as the report demonstrates, ferrous scrap is big business with considerable potential. Cross-border trade alone is estimated to exceed $56bn per annum. Around 120m tonnes of scrap material, mostly seaborne, will be moving around the world in 2011.

The report, authored by metals experts at FIS and TSI, provides a concise summary of the factors influencing steel scrap prices in Turkey, the global market’s bellwether for supply, demand and pricing.

The FIS Guide to Steel Scrap Trade is available for only $395/€280/£245, excluding any applicable sales tax.

Freight Investor Services, the leading brokerage for freight and commodity swaps, has deepened its partnership with Cleartrade Exchange to promote increased price transparency and liquidity in the fertilizer swaps market.

Recent press coverage of the emergence of container freight derivatives is a good indication of the divergent views that derivatives can provoke. Reaction has ranged from the damning judgement made by some major carriers to the broad support of some influential shippers, who have also questioned why it took so long for this new tool to emerge.

The FIS-Shippers' Voice White Paper is intended to bring further light to the subject. It explores how the emerging container freight derivatives market actually works for shippers, freight forwarders procuring freight services and carriers, what the risks are and how to manage them and presents scenarios that allow users to judge for themselves how container freight swaps can work for their business.

To read the report, click below.

Freight Investor Services is pleased to announce it has added to its US Midwest presence, recruiting two brokers to cover swaps contracts for US domestic Hot Rolled Coil, Iron Ore and Scrap from the St Louis, MO, area.

Freight Investor Services is pleased to announce the completion of the first scrap metal steel swap trade. The first trade was concluded for the May period at a price of $422 per tonne between Cargill International and a London based physical trader was settled against The Steel Index's Turkish CFR Scrap Metal Index and cleared at LCH.Clearnet.

In the aftermath of the devastating earthquake that has hit Japan, fears are growing over the potential for radiation leaks from damaged nuclear plants. Equity markets have been hit while FFA prices have also sustained significant losses. With the situation still unfolding, the longer term impact of the disaster on commodity markets is unclear, although some initial conclusions can be drawn.

Dry bulk freight rates have collapsed in recent weeks, dragged down by particular weakness in the Capesize sector. The last couple of days have seen some upward movement but Capesize earnings have now stood below those for Panamax, Supramax and Handysize vessels for almost a month, or 22 trading days. Analysis of previous slumps and their subsequent recoveries helps support the theory that while severely wounded, the Capesize market is not dead yet.

Leading freight and commodity derivatives brokerage Freight Investor Services has signed up as a Broking Member of Cleartrade Exchange, the order management and processing platform dedicated to the OTC freight and commodity derivatives markets.

The speed and strength of the latest jump in steel prices - as well as sharp rises in steelmaking raw material costs - has come at a time when dry freight levels have collapsed. Generally bullish sentiment in steel and its related commodity markets has caused a disconnect between forward prices in these sectors and those for freight.

FIS fertilizer swaps proved an early indicator of substantial price increases through H2 2010, and the forward curve shows continuing price strength into Q1 2011,  whilst a softening bid/ offer spread for Q2 suggests some flattening further out in 2011 .

New source of liquidity tapped as Ronly and Morgan Stanley Commodities execute first trade on new cash-settled contract

Freight Investor Services is delighted to announce the launch of two more cash-settled steel swap contracts, building on the successful release of three new products announced last month.

Initial trade confirms investor interest in cash-settled exposure to China market.

Freight Investor Services is delighted to announce the launch of three new steel derivatives contracts, developed in response to market demands for a cleared, cash-settled swap product.

Objections to container swaps have centred on a perceived threat to long-term carrier contracts. But a liquid container swaps market would increase carrier contract participation, encourage the formation of long-term relationships and simultaneously reduce the risk of default.

Freight Investor Services has released a Container Freight Derivatives Calculator which enables players in this nascent market to calculate what hedging requirements they may have, based on their physical market exposure.

FIS is pleased to announce the introduction of a new index for settlement of fertilizer swaps in response to the development of the swap market in Asia.

The launch of an OTC Clearing Service for Container Freight Swap Agreements (CFSA) by LCH.Clearnet represents the next important milestone in the evolution of this emerging market.

After more than 40 years of painfully slow annual price negotiations for the supply of iron ore to the world's steel makers, this 1.3 billion tonne market - of which China absorbs the majority, is going financial.

Freight derivative volumes are rebounding to 2008 levels on increased iron ore shipments and volatile freight rates, although values are lower, managing director of brokerage FIS John Banaszkiewicz told Reuters Insider.

To see the interview click here: http://etv.thomsonreuters.com/link.html?ctype=group_channel&chid=3&cid=85149&shareToken=Mzo4NTE0OQ%3D%3D%0A

The first FFA trade on the Supramax India-China timecharter route has been completed between principals Morgan Stanley and Cargill International SA Geneva, brokered by FIS.

FIS brokes early for Christmas as C3 and C5 markets gather momentum

FIS Ltd (Freight Investor Services) is pleased to announce the completion of the first fertilizer swap trade cleared at LCH.Clearnet.

Leading clearing house LCH.Clearnet has officially launched clearing services for the FIS cash-settled fertilizer swap. The go-live today for central counterparty clearing provides another dimension to trading in the chemical fertilizer market.

FIS, the derivatives broker and LCH.Clearnet will launch an OTC clearing service for the fertilizer swap market on October 16, 2009 in a move that will increase transparency and liquidity and greatly reduce counterparty risk.

Traders working positions in freight derivatives and iron ore swaps need no reminder that the first half of 2009 has been a roller-coaster ride. But market players are now able to realise some cost efficiencies, with clearing houses in London and Singapore offering inter-commodity spread credits.

London. There is a new investment darling on the block and its name is iron ore. As unglamorous as this new kid in the class might sound, the price of this raw material, fundamental for the production of steel, has been growing steadily in the past few months.

FIS (Freight Investor Services) in cooperation with the London Clearing House (LCH.Clearnet) is pleased to announce the launch of a cleared CIF China cash settled iron ore derivative.

LCH.Clearnet is set to launch clearing of over-the-counter (OTC) iron ore swap contracts. The service will be introduced in May 2009. Iron ore is one of the main raw materials used to make steel. Iron ore swap contracts are vital in managing risk against volatile price movements. The introduction of clearing is essential for further growth of this market, as it will increase trading capacity and reduce concerns over counterparty risk.