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ICE Expands Global Natural Gas Liquids Complex with the Launch of a Liquid Petroleum Gas Houston to Chiba Freight Future Based on Baltic’s BLPG3 Assessment
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Rhea-AI Summary
Intercontinental Exchange (NYSE:ICE) announced the launch of a new freight futures contract on September 27, based on the Baltic Exchange's LPG assessment from Houston to Chiba. This cash-settled contract aims to help participants manage freight price risk on a major LPG export route. Freight rates for this route have ranged from $45.75 to $182.40 per ton since April 2020. With increasing demand for LPG in Asia and a robust market for U.S. exports, the new contract will complement ICE's existing freight futures.
Positive
Launch of the new LPG freight futures contract could enhance trading volumes and liquidity.
The contract allows better risk management for clients dealing with significant price fluctuations.
Negative
None.
LONDON & NEW YORK--(BUSINESS WIRE)--
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology, and market infrastructure, announced that it plans to launch a new freight futures contract based on the Baltic Exchange’s liquid petroleum gas (LPG) assessment for the Houston to Chiba route on September 27.
The contract, called the LPG (BLPG3) Forward Freight Agreement (FFA) Houston To Chiba (Baltic) future, will be cash settled and allow participants to manage freight price risk on one of the top export routes for liquid petroleum gas. The U.S. is one of the world’s top producers and leading exporters of LPG and Asia is one of the largest demand centers for the fuel. Freight rates from Houston to Chiba have fluctuated between $45.75 and $182.40 per ton since the Baltic Exchange began reporting on the route in April 2020*.
“Hedging the U.S. Gulf Coast to Japan export route has become ever more critical for our customers,” said J.C. Kneale, Vice President, North American Gas and Power, at ICE. “ICE’s natural gas liquid markets are growing strongly, with open interest out to 2024. With the new LPG freight contract, we are helping our customers to further manage their entire portfolio of exposure for LPGs from production to shipping to consumption.”
The new BLPG3 contract will trade alongside ICE’s existing LPG freight future based on the Baltic Exchange’s assessment for the Middle East to Japan route (ICE: WAT).
*Source: Baltic Exchange
About Intercontinental Exchange
Intercontinental Exchange, Inc. (NYSE: ICE) is a Fortune 500 company that designs, builds and operates digital networks to connect people to opportunity. We provide financial technology and data services across major asset classes that offer our customers access to mission-critical workflow tools that increase transparency and operational efficiencies. We operate exchanges, including the New York Stock Exchange, and clearing houses that help people invest, raise capital and manage risk across multiple asset classes. Our comprehensive fixed income data services and execution capabilities provide information, analytics and platforms that help our customers capitalize on opportunities and operate more efficiently. At ICE Mortgage Technology, we are transforming and digitizing the U.S. residential mortgage process, from consumer engagement through loan registration. Together, we transform, streamline and automate industries to connect our customers to opportunity.
Trademarks of ICE and/or its affiliates include Intercontinental Exchange, ICE, ICE block design, NYSE and New York Stock Exchange. Information regarding additional trademarks and intellectual property rights of Intercontinental Exchange, Inc. and/or its affiliates is located here. Key Information Documents for certain products covered by the EU Packaged Retail and Insurance-based Investment Products Regulation can be accessed on the relevant exchange website under the heading “Key Information Documents (KIDS).”
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 -- Statements in this press release regarding ICE's business that are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see ICE's Securities and Exchange Commission (SEC) filings, including, but not limited to, the risk factors in ICE's Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC on February 4, 2021.
