Volatility in the dry freight market has increased dramatically over the past two years, with the Chinese market in particular driving demand. This has focused attention on forward freight agreements (FFAs), which are commonly traded as three-month, six-month and one-year contracts, and which vary according to ship size and routes. The physical shipping market uses freight derivatives to hedge their shipping requirements.
Torstein Bomann-Larsen, analyst and derivatives trader at Western Bulk
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