Enhancing pricing power in the global shipping market, Shanghai launches two innovative tools
On September 15th, the Policy Exchange Conference on Innovation in Shipping Finance and Promotion of High Energy Shipping Service Industry Development in Lingang New Area was held in Shanghai. At the press conference, it was learned that the Shanghai Shipping Exchange has strengthened cooperation with the Lingang New Area Management Committee and the Shanghai Futures Exchange, leveraging the benefits of institutional innovation in the Lingang New Area. The exchange has launched two major tools, an international container space trading platform and consolidation index futures, to help Shanghai enhance its pricing power in the global shipping market and enhance the risk management level and international competitiveness of shipping industry chain enterprises. As of September 14th, the consolidated transportation index futures have accumulated 5.2756 million transactions, with a daily average of 263700 transactions; The cumulative transaction amount is 239.985 billion yuan, with a daily average of 11.99 billion yuan; At the end of the period, it held 49800 positions, becoming a tool for different shipping industry chain entities such as shipping companies, shippers, and freight forwarders to discover prices, effectively suppress market fluctuations, and optimize resource allocation.
"Supporting domestic and foreign enterprises and institutions to provide services such as shipping financing, shipping insurance, shipping settlement, shipping material leasing, ship trading, and shipping arbitration; exploring the development of shipping index derivatives business, and enhancing high-end shipping service functions" is an important institutional innovation task clearly defined by the State Council in the overall plan for the Lingang New Area. In November 2022, with the support of relevant departments such as the Municipal Transportation Commission and the Shanghai Shipping Exchange, the international container space trading platform was launched for trial operation. The trading model is "customized non-standard space contracts+space release", providing shipping enterprises with functions such as "locking space, locking freight rates, performance guarantees, and dispute resolution".
In August 2023, the China Securities Regulatory Commission approved the registration of the Shanghai Futures Exchange's consolidation index futures and officially listed them for trading on August 18. This is the first domestic shipping futures variety, the first service futures variety, and the first index and cash delivery futures variety listed on the commodity futures exchange. It is an important measure for the Lingang New Area to promote institutional innovation in the shipping field, efficiently allocate global shipping resources, and create a shipping service function cluster area.
The Consul General of the United Arab Emirates in Shanghai, Naqbi, stated that the shipping index futures and international container space trading platform are important measures taken by the Lingang New Area, Shanghai Futures Exchange, and Shanghai Shipping Exchange to promote innovation in shipping finance and serve the resource allocation of shipping enterprises. The Lingang New Area signed a strategic cooperation agreement with Dubai Jebel Ali Free Zone in 2022, and this year signed a memorandum of understanding with various trade free zones in Dubai. The two sides will strengthen cooperation in various fields such as institutional innovation, commerce, logistics, and trade, help more Chinese enterprises establish connections with the global market, promote trade flow, and jointly create economic prosperity. This innovation in shipping finance will create conditions for both sides to better serve market openness and expand cooperation in a wider range of fields.
This policy exchange meeting will focus on the import and export trade scenarios of shipping enterprises, and explore effective risk management tools to achieve futures and cash linkage, hedging, and market volatility suppression through shipping index futures and international container space trading platforms. Zhao Yihuai, the full-time deputy director of the Lingang New Area Management Committee, expressed the hope that through this event, more enterprises can enjoy the dividends of the Lingang New Area system innovation, fully exchange and explore the use of shipping futures varieties, spot trading platforms, and comprehensive financial tools, effectively manage risks, efficiently allocate resources, and jointly promote the high-energy shipping service industry in the Lingang New Area to a new level, helping to build the Shanghai International Shipping Center.