New FIS Service for Bunker Hedging

The system offers real-time data on screen

Freight and commodity derivative broker Freight Investor Services says it has launched a live bunker fuel pricing service that will make bunker hedging more practical for shipowners and charterers.

The FIS Bunker Screen collates prices from multiple market-makers and offers firm bids and offers for a six months period.

The real-time screen prices reflect price changes for Singapore 180CST, Singapore 380CST, and Rotterdam 3.5 percent.

"The FIS Bunker Screen is what the fuel oil swaps market has been waiting for," said Damien King, bunker broker with FIS.

"It is a completely new concept that puts an unprecedented level of market access in the hands of users.

"And because FIS offers swap contracts in lot sizes of one tonne upwards, we think that it will appeal to shipowners and charterers who need to hedge, but until now haven't been as well-served by the market as they should have been."

The system automatically feeds bunker prices to the screen, and cash-settled swaps can be done directly on screen.

"When a shipowner knows they are performing a given voyage or charter, they can use the screen to hedge their fuel like-for-like in the volume that they need," said Ali Ersen, bunker broker with FIS.

"That trade can be made with or without the assistance of the broker and they can monitor the price changes in real time through the course of the contract, adjusting their position as necessary."

Cleartrade Exchange recently launched a new exchange to support bunker fuel swaps and hedging that also allows for trading in amounts as small as one tonne.