Analysis Of The Hedging Performance Of China Coastal Coal Freight Future

China coastal coal freight future was developed in December2011.The future provides a tool of hedging for the China coastal coal shippingmarket.As a freight hedging tool, the FFA is active in the international market,however, China coastal coal freight future has been introduced just over ayear. The hedging performance of China coastal coal freight future isworthy of studying.In this paper, the characteristics of China coastal coal shipping marketis introduced firstly. Then China Coastal Coal Freight Index and coastalcoal freight futures market are introduced.The basic knowledge of hedging theory and common-used optimalhedge ratio models are introduced. The OLS model and VAR model areused to estimate the optimal hedge ratios.The analysis result is helpful for the development of China coastalcoal freight future to some extent.