SHANGHAI: China’s Shanghai International Energy Exchange (INE) is looking to launch its freight index futures contract this year, Yang Yiping, the exchange’s associate director in the international cooperation and business development department, said on Wednesday.

“This will be our first financially settled commodities futures in China,” Yang said during an online conference. Currently, all China’s commodities futures contracts are settled by physical delivery.

“Given the volatile container freight price this year, I believe this contract will provide a good tool for price discovery and risk management for shipping companies, ship owners and any other participants,” Yang said.

Freight rates have soared this year as a global shortage of containers and as corona virus curbs cause congestion at ports. This has disrupted global supply chains as ships transport around 90% of global trade.

The Shanghai Futures Exchange, which owns the INE, said in May it was conducting research and development of products open to foreign participation such as freight index futures.

China’s COSCO Shipping Group and Dalian Commodity Exchange have also signed an agreement to jointly work on developing shipping derivatives such as container capacity futures.