The European Energy Exchange (EEX) has unveiled a project designed to help it win a bigger slice of the cleared freight market in Asia.
The Leipzig, Germany-based company is ditching the Cleartrade Exchange (CLTX) brand in order to grow its share of dry freight futures market and levels on a par with rival clearing houses Singapore Exchange (SGX) and Nasdaq Futures (NFX) of the US.
Under the restructuring, CLTX's clearing and exchange-traded operations will be rebranded as EEX Asia, offering futures contracts on freight and seaborne commodities including fuel oil and iron ore.
A separate division, Cleartech, will be established to handle technological solutions on the multi-exchange, over-the-counter (OTC) services platform.
The name of Cleartrade, which has been linked to dry freight markets since it was founded seven years ago by John Banaskiewicz who sold it to EEX in 2016, will effectively disappear from the freight market.
EEX is upping its game in Asia as part of a battle for freight business with rival freight clearing house SGX, owner of the Baltic Exchange.
The German exchange signalled its ambitions last year by novating dry bulk freight forward freight agreements (FFAs) from clearing house LCH to its own facility, European Commodity Clearing (ECC).
In April, the ECC was approved as a recognized clearing house (RCH) for derivatives by the Monetary Authority of Singapore (MAS).
EEX only handles 5% of the dry freight cleared market and is keen to significantly grow that market share.
“We want to be one of the three credible clearing houses in this market,” said Egbert Laege, EEX Group board member for global commodities.
“We think there is room for all three of them sharing the cake equally. That’s where our ambition lies.”
EEX’s attempt to drum-up more business in Singapore reflects the ongoing drift of cleared freight business away from Europe following the introduction of tougher financial regulations earlier this year.
While SGX and EEX are putting more focus on their Asian divisions, Nasdaq has migrated its European freight business to its US-based Nasdaq Futures (NFX).
