The Baltic Exchange explained

The Baltic Exchange explained

greek vessel Jean Louis Drye

Greek Ship Poyagial Etar by Jean Louis Drye

In The Baltic, Time-Charter Equivalent (TCE)  I felt that the Baltic was misunderstood so I provided my explanations about the Baltic, calculations made by Baltic participants and gave some arguments about how the index are used by the markets.

In the Baltic Exchange explained, I will now focus on what the Baltic aims to do, provide more background information about its internal functioning to examine and better comprehend its role in the prices formation for freight and commodity markets.

The Baltic Exchange is an independent source of maritime market information for the trading and settlement of physical and derivative contracts.
Its international community of over 600 members encompasses the majority of world shipping interests and commits to a code of business conduct overseen by the Baltic.

The Baltic Exchange Limited  is a company limited by shares and owned by its shareholders most of whom are the member companies.

baltic 2

Who are its members?

Baltic Exchange members are engaged on behalf of shipowners and charterers  in arranging the ocean transportation of bulk cargoes such as oil, grain and iron ore providing an essential lifeline to the industrialized nations of the world. Members are drawn from across the international bulk shipping industry and are mainly shipbrokers, freight derivative brokers, trading houses, shipowners and cargo interests. The Baltic also embraces those professions and organisations whose activities are closely related to the maritime world. The Exchange derives its income from membership subscriptions, the sale of its market data, transaction revenue from its Baltex marketplace for FFAs, rents for offices in its London building and its facilities for catering.

Membership of the Exchange is available in one of four broad groups:
• Principals who trade on their own account. They either own or control ships or have
cargoes to move;
• Brokers, who act as intermediaries between shipowners and cargo interests, and do
not trade on their own behalf ;
• FFA Trading members who may be in either of the above categories but are also
participants in the FFA market ;
• Non-Market Members including maritime lawyers,
arbitrators, ship financiers and other maritime institutions.

What does the Baltic Exchange do?

The Exchange regulates its members’ activities, collates and distributes dry, wet and gas freight market information to its members, resolves disputes, speaks
on behalf of the market and provides business facilities for its members. The Baltic is more than just an information  provider, it provides self-regulation in chartering, sale and purchase and freight derivatives markets.

Seller of Information

Brokers panelists of the Baltic report a transaction to the Baltic Exchange and to other brokers members of the Baltic.

Obviously the Baltic wants to protect its information between and for its members because the information subscription is a major source of revenues. Also if transactions are reported outside and without the baltic framework, the Baltic would lose its credibility and utility.

Public have only an access to Baltic dry index and sub-indexes BCI, BPI… TCE estimates are also published by brokers to their clients, they might also differ a bite from what the Baltic is publishing.

The onward transmission to non-members of any postings issued by the Exchange and received by members is strictly prohibited as this could lead to action for defamation against both the member and the Baltic. The fixture lists, indices, assessments and market reports issued by the Baltic are proprietary information, and any circulation of these without permission or authority, could lead to legal action being taken.- Baltic Code of Ethics

The fixture lists, indices, assessments and market reports issued by the Baltic are strictly proprietary information, and any circulation of these without permission or authority, could lead to legal action being taken.Despite copyright infringement warnings,  some are distributing the information and some are even re-packaging very detailed proprietary information generated by the Baltic for re-selling (something that I have reported to the Baltic).

Dry indices

The Baltic Exchange Dry Index  is derived from and summarises the Baltic Exchange Handysize Index (BHSI) , the Baltic Exchange Supramax Index (BSI) , the Baltic Exchange Panamax Index (BPI) and the Baltic Exchange Capesize Index (BCI) . These indices are all calculated from the average rates on major timecharter and/or voyage routes, as assessed by a panel of competitive brokers who are members of the Baltic Exchange. Publishing time is 1300 (London).

Capesize (BCI) Routes are

Tubarao to Rotterdam
Tubarao to Qingdao
Richards Bay to Rotterdam
W Australia to Qingdao
Bolivar to Rotterdam
Gibraltar-Hamburg Transatlantic Round Voyage
Continent/Mediterranean trip Far East
Pacific Round Voyage
China/Japan trip Mediterranean/Continent
China-Brazil round voyage
Richards Bay to Fangcheng
Revised backhaul

Publishing time is 1300 Monday to Friday (London) and current panelists are Arrow Chartering (UK), Banchero-Costa, Barry Rogliano Salles, Clarksons, Fearnleys, E A Gibson Shipbrokers
Howe Robinson, Ifchor, I & S Shipping. LSS B, SSY and Thurlestone Shipping.

Panamax (BPI) Routes are

Transatlantic RV
Skaw-Gibraltar/Far East
Japan-South Korea/Pacific Round Voyage
Implied voyage Newcastle-Qingdao
Far East/NoPac-Australia/Skaw-Passero

Publishing time is 1300 Monday to Friday (London) and current Pannellists are Acropolis Chartering, Arrow Chartering (UK), Banchero-Costa, Chinica Shipbrokers, Clarksons,
Fearnleys, E A Gibson Shipbrokers, Hai Young, Howe Robinson, ICAP Shipping, Ifchor, LSS Geneva, Maersk Broker, Optima Chartering, SSY, Thurlestone Shipping and Yamamizu.

 Supramax (BSI) Routes are

Antwerp-Skaw trip Far East
Canakkale trip Far East
Japan-South Korea/NoPac or Australia Round Voyage
Japan-South Korea trip Gibraltar-Skaw range
US Gulf-Skaw-Passero
Skaw-Passero-US Gulf
West Africa via east coast South America to Far East
West Africa via east coast South America-Skaw-Passero
Transatlantic Round Voyage

Publishing time is 1300 Monday to Friday (London) and current Pannellists are Arrow Chartering (UK), Ausea, Clarksons, Hartland Shipping, Howe Robinson, ICAP Shipping

John F Dillon & Co, Lightship, Maersk Broker, Simpson Spence & Young and Yamamizu Shipping Co.

Supramax (BES Asia) Routes are

East coast India – China
Implied Voyage Vizag – Qingdao
South China via Indonesia / east coast India
TRIAL – North China via Indonesia / South China

Publishing time is 1300 (Singapore) Monday to Friday  and current Pannellists are ACM Endeavour, Ausea Beijing,Clarksons (Asia), Galbraith’s Shanghai, Howe Robinson & Co (Asia)
Icap Shipping Singapore, I & S Shipping, Interocean Delhi, Simpson Spence & Young (Asia) and Yamamizu Shipping Co

 Handysize (BHSI) Routes are

Skaw-Passero trip Recalada-Rio de Janeiro
Skaw-Passero trip Boston-Galveston
Recalada-Rio de Janeiro trip Skaw-Passero
US Gulf trip via US Gulf or north coast South America to Skaw-Passero
South East Asia trip via Australia to Singapore-Japan
South Korea-Japan via NoPac to Singapore-Japan

Publishing time is 1300 (Singapore) Monday to Friday  and current panelists are Ausea Beijing, Barry Rogliano Salles, Braemar Seascope, Clarksons (Geneva), Clarksons (Asia)
Doric Shipbrokers, Hartland Shipping, Howe Robinson & Co, H Vogemann, Icap Shipping Singapore, I & S Shipping , Interocean Delhi, Lightship, Rigel Shipping
Simpson Spence & Young, Simpson Spence & Young (Asia) and Yamamizu Shipping Co.

Wet indices

Clean Tankers Asia (BITR Asia) Routes are

30,000mt CPP/UNL Singapore to Japan
30,000mt CPP Singapore to East Coast Australia
40,000mt CPP/UNL South Korea to North Pacific West Coast
40,000mt CPP South Korea to Singapore
35,000mt Naptha Sikka (WCI) to Japan

Publishing time is 1600 (Singapore) Monday to Friday and current Pannellists are ACM Shipping (Singapore) Eastport Chartering, Clarksons (Asia), Icap Shipping Tankers, McQuilling Brokerage Partners Inc (Singapore), Odin Marine (Singapore), Simpson Spence & Young (Singapore) and Taipan Shipbrokers

Time Charter Equivalents (TCE) Publishing time is 1600 (Singapore) Monday to Friday.

VLCC, SUEZMAX, MR and AFRAMAX TCE are Published time at 1600 (London) Monday to Friday.

The Baltic Exchange Dirty Tanker Index (BDTI) is derived from and summarises the rates on the crude oil and dirty products routes:

280,000mt Middle East Gulf to US Gulf
260,000mt Middle East Gulf to Singapore
260,000mt Middle East Gulf to Japan
260,000mt W Africa to US Gulf
130,000mt W Africa to US Atlantic coast
135,000mt Black Sea to Mediterranean
80,000mt North Sea to Continent
80,000mt Kuwait-Singapore (Crude/DPP Heat 135F)
70,000mt Caribbean to US Gulf
50,000mt Caribbean to US Atlantic – double hull
55,000mt ARA to US Gulf
80,000mt South East Asia to east coast Australia
260,000mt West Africa to China
30,000mt Black Sea to Mediterranean
100,000mt Baltic to UK-Continent
30,000mt Baltic to UK-Continent
80,000mt Cross Mediterranean

The Baltic Exchange International Tanker Routes (BITR) are average rates, usually expressed in Worldscale, on major oil routes, both dirty and clean, as assessed by a panel of competitive brokers who are members of the Baltic Exchange.

The Baltic Exchange Clean Tanker Index (BCTI) is derived from and summarises rates on the clean products routes:

75,000mt Middle East Gulf – Japan
37,000mt Continent to US Atlantic coast
38,000mt Caribbean to US Atlantic coast
55,000mt Middle East to Japan
30,000mt Algeria to Euromed
22,000mt CPP/UNL m/distillate Baltic to UK/Continent
65,000mt CPP/UNL m/distillate Middle East Gulf to UK/Continent
38,000mt US Gulf to Continent

Publishing time is 1600 Monday to Friday (London) and current Pannellists are A C M Shipping, Barry Rogliano Salles, Braemar Seascope, Bravo Tankers
Charles R Weber, Clarksons, Clarksons (Geneva), Fearnleys, Galbraith’s, E A Gibson Shipbrokers, Icap Shipping, Icap Shipping (Singapore)
McQuilling Brokerage Partners  (New York), McQuilling Brokerage Partners  (Singapore), Odin Marine (Singapore), Poten & Partners (New York)
Simpson Spence & Young, SSY Tankers (New York) and True North Chartering.

The Baltic Exchange Liquefied Petroleum Gas Route
(BLPG) is a single route assessment, assessed by a panel of brokers. Better known as the Baltic VLGC spot rate. The Basis is for a voyage Ras Tanura-Chiba on a VLGC (Very Large Gas Carrier) of about 76,600 cbm (44,000mt )  in ($/MT). Panelists are A C M Shipping, Braemar Seascope, Clarksons, Fearnleys, EA Gibson Shipbrokers, Inge Steensland, Lorentzen & Stemoco and Poten & Partners (UK). Publishing time for the BLPG is 1600 Monday to Friday (London)

The Baltic Exchange Sale and Purchase Assessments (BSPA) are weekly averages of the value of six vessel types( VLCC, Aframax, MR product tanker, Capesize
Panamax and Supramax) as assessed by a panel of brokers.

Curent brokers are Arrow Chartering (UK)
Banchero-Costa, Barry Rogliano Salles, Compass Maritime Services, Fearnleys, Lorentzen & Stemoco, Mallory Jones Lynch Flynn, Optima Shipbrokers, R S Platou Shipbrokers
SSY Valuation Services and Yamamizu Shipping. Publishing time is 1600 Monday to Friday (London).

The Baltic Exchange Demolition Assessments (BDA) are weekly averages of the demolition value of wet and dry vessels for delivery China and the Sub-continent of Asia. Current panelists are Clarksons
Compass Maritime, Optima Shipbrokers, JV Shipping and Simpson Spence & Young. Publishing time is 1600 Monday to Friday (London).


The Baltic Exchange Forward Assessment (BFA) is a daily average of the current bids and offers at the end of the trading day for forward prices on dry and wet routes,provided by a panel of FFA brokers.

Baltic Forward Assessments are an estimated mid price based on assessments submitted by leading FFA brokers at 1730 (London time) covering both the dry and tanker markets.

The Baltic Options Assessments (BOA) are daily assessments of implied volatility for an at-the-money option in the dry bulk options market submitted by brokers at 1730 (London).


  • The Baltic Exchange’s indices are widely used  by shipowners, charterers but neither shipowners nor charterers are allowed to make assessments.
  • All the brokers providing assessments are audited to ensure they are fully active on the trades they are accessing. The Baltic wants to prevent having a shipbroker also having money in the market, a thin line when prices are assessed.
  • In the FFA market if the broker acting as an intermediary has any direct interest as principal in a transaction, it must be divulged to both counterparties during contract negotiation.
  • The Baltic has also users group and committees examining the quality of the returns made by the individual Baltic panelists and the performance of the Baltic.

Examples of some of the unacceptable and manipulative practices for a ship or FFA broker member of the Baltic.

  • It is unacceptable to offer named tonnage against tenders without the authority of owners or disponent owners and Brokers must not imply that they hold a cargo firm or exclusively when they do not.
  • A vessel must not be held on “subjects”* for the purpose of determining market direction.
  • It’s unacceptable to attempt to manipulate prices in the FFA market through the abuse of “subjects” in the physical market.
  • It’s unacceptable for a charterer to fix two vessels or more for one cargo and then hold the vessels over a period of time on “subjects”.

How does the Baltic produce its daily shipping assessments ?

The Baltic publishes market information for the trading and settlement of physical  contracts. They are also used to settle multi-million dollar FFA trades.

Basis: The primary importance in developing a price assessment that represents true market value.

The assessment is not just the “last done” fixture but also takes into consideration a professional’s view of the market based on the cargoes and tonnage currently available as well as recent fixtures. They want to protect the price assessment against the distortion of one fixture very off  the mark. The Baltic also defines what is a Handysize, a Capesize or a Aframax… They recognize that trade patterns, routes change overtime and want to ensure that the assessed routes and vessels unceasingly reflect the realities of the market and trading patterns.

I’m always eager to foster relationships with people in the commercial shipping and commodity business.

If you would like to discuss privately, drop me a line.

Also please feel free to add your comment to this discussion.

© 2014, The Trade  Shipping and Finance Wizard

Navigating the commodities markets with Freight and Spreads



The Baltic, TCE and Charts Explained

*The word SUBJECTS in shipping speak is a shortened way of saying. “Subject to” ex: subject to director approval… 

In London, a fixture ‘subject details’ is viewed as an agreement with open terms, which generally is not a contract at all. By contrast, in America, such a fixture will be regarded as binding, and arbitration often will be ordered in a ‘subject details’ case. It is one of the great schisms in the maritime laws applied on opposite sides of the Atlantic.

2 thoughts on “The Baltic Exchange explained

  1. You could also add that the Baltic acts as a Self-Regulatory system for the participants in the world seaborne trade.

    Thorough remarks about the safeguards implemented by the Baltic to develop indices truly reflecting the market.

    Robert Piller,
    Director & Lecturer in Commodity Trading & Finance at the Haute Ecole de Gestion de Genève HESGE


  2. Pingback: An Apple-to-Apple Basis Comparison, One Jones Act unit vs One Foreign Flag Vessel Unit. $/bbl What the Heritage Foundation got wrong about the Jones Act ! | Navigating the Commodity Markets with Freight and Spreads

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