LONDON (Commodity Online): In a move designed to stimulate freight derivative trading, the Baltic Exchange will be calculating its Tanker Time-Charter Equivalent Assessments (TCEs) based on bunker prices which are in line with the bunker swaps market.

In future the basis for TCE conversions on its various routes will be Rotterdam 380 cst, Rotterdam 380 cst max 1 per cent sulphur or Singapore 380 cst. Diesel or gasoil requirements will not be taken into consideration and the parameters of the Baltic Exchange calculations have been amended accordingly.

The changes will take effect on Monday 2 August 2010 and follow consultation with the market.
The bunker prices will continue to be provided by Bunkerworld and published on www.balticexchange.com

All TCE voyage descriptions will also continue to be available on www.balticexchange.com together with port costs supplied by Cory Brothers Shipping and exchange rates used in the calculations provided under licence by XE.com.

The calculation process is a transparent one with subscribers to the Baltic Exchange’s freight market services now able to access a voyage calculator which shows all the parameters set when arriving at the TCE rates. They can also adjust parameters in the voyage calculator to reflect details of their own business.

The Baltic’s TCE calculations were previously based on a range of bunker prices including Aruba, Augusta, Fujairah, Philadelphia and Wilhelmshaven.

The Baltic Exchange has been providing average dollar pricing conversions for Very Large Crude Carriers (VLCCs), Suezmax and Aframax tankers derived from a range of routes expressed in Worldscale since 2008.