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Imarex launches Time Charter Equivalent contracts

Commodity derivatives exchange group Imarex has announced that from October 1 members will be able to trade cleared tanker freight futures denominated in US dollars per day, known as Time Charter Equivalent contracts, on the Imarex trading platform, in what is says is the first time electronic trading and clearing has been made available for such contracts.

'Physical time charters are traded in US dollars per day and listed tanker companies report their results in dollars per day,' says Richard Arnesen, global head of tankers at Imarex. 'This has caused an increasing number of market participants to ask for the possibility to trade dollar-denominated contracts as opposed to Worldscale, especially on the back end of the curve and generally for longer-term contracts.'

The first contract to be listed on the screen will be TD3_TCE (Middle East-Japan), while settlement will be against the Dirty Tanker Time Charter Equivalent TD3-TCE index published by the Baltic Exchange.

Last month the notional value of tanker derivatives traded via Imarex and NOS Clearing rose by 88 per cent compared with the same period of 2007, exceeding the USD500m mark for the first time.

Imarex Nos, based in Oslo with subsidiaries in Singapore, London, Houston and Stavanger, holds strategic investments in subsidiaries that enable international commodity traders to research, execute and settle derivatives transactions.

The group owns two exchanges, a clearing house, various brokerage groups and a research operation, all focusing on commodity derivatives markets. Its customers include banks, oil majors, power generators, ship owners and hedge funds.

The exchange allows principals in the freight and bunker fuel oil derivatives market to trade financial futures contracts linked to ocean freight rates and the price of fuel for tankers and for dry bulk vessels on an electronic trading platform. All trades are cleared directly with the Norwegian Futures and Options Clearing House.

The group provides research, transaction and settlement services for financial derivatives based on ocean-going freight, heavy fuel oil, electric power, airborne emissions and farmed salmon.

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