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New freight derivative set to change the LNG transportation game

After the boom in JKM futures volumes, LNG traders now have another addition to their risk management toolkit

One of the unintended consequences of the ongoing commoditisation of the LNG industry has been the growth of the spot shipping market. As contract duration decreases and the number of market participants increases, mid-market traders need more flexibility from their freight portfolios to service demand. This inevitably leads to more spot market shipping requirements, shorter duration charters and increasing sub-chartering activity, as these portfolios are rebalanced and optimised to suit different market conditions. Although seen as somewhat distasteful by established players with long-term contracts and portfolio shipping locked against it, this development has resulted purely from the gr

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