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First trades in CME Group’s LNG freight futures contracts agreed

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LNG Industry,

According to Reuters, shipbroker Affinity (Shipping) LLP has announced that it has facilitated the first trades in CME Group’s LNG freight futures contracts.

Reportedly, the trades involved both Total and Trafigura, and were submitted for clearing using CME Group’s ClearPort system.

Earlier last month, CME Group reportedly said that it would be the first futures exchange to launch trading of three LNG freight futures contracts in response to growing demand for hedging tools on the LNG market.

The Head of LNG Derivatives at Affinity, Benjamin Gibson, said: “Since we arranged the initial bilateral LNG forward freight agreement (FFA) trades over the summer, the market has expressed a strong desire to be able to trade these contracts on a cleared basis.”

According to Reuters, the contracts offered by CME Group are based on the assessment of three LNG shipping routes that Baltic Exchange began publishing earlier in 2019.

LNG freight futures are available to trade on the New York Mercantile Exchange.

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