The Volatility Spillover Effect In Dry Bulk Shipping Forward Freight Agreement Market

International shipping market demand is the international trade derived demand, the development of the international shipping market, especially dry bulk shipping market, is effected by international politics, economy, technology and natural environment factors,so its volatility is abnormal violent, and full of risk, shipping derivatives FFA,as an important way of avoiding risk on shipping market, having Both shipping market and the financial market characteristics, is more and more popular. However dry bulk shipping FFA market as a shipping derivatives, a special kind of financial market products, comparing with general financial market products, also has the fluctuation spillover effect. In order to survive in the severe shipping market, and obtain greater development, our shipping market operator should grasp this volatility spillover effect. Therefore, the dry bulk shipping FFA market volatility spillover effect is particularly important.On the basis of qualitative analysis, through quantitative model of particular course (C5 and P3A routes), this paper research the volatility spillover effect of dry bulk shipping the FFA market and spot market. Here the main quantitative model include the double variables of the EGARCH and VS-MSV mode, EGARCH model introduces error of the mean equations to the wave equation from one market another market, Thus investigate volatility spillover effect, VS-MSV model,by calculating different market fluctuations of time sequence of a logarithm correlation coefficient, determine the fluctuations overflow effect between two markets.The study shows:since 2008,when financial crisis happened, there are fluctuation spillover effect between January and march FFA market and spot market of C5 and P3A lines, and the fluctuation spillover effect are one-way, namely the spot market has obvious fluctuation spillover effect to January and march FFA market, while the opposite direction fluctuation spillover effect is not obvious;compared to each other,the fluctuation spillover effect of January FFA market is more apparent then march. This study can help participants of China shipping market better use FFA, one risk management tools,forcast price, hedg,and elud market risk.