Identifying circles across paper markets has always depended on having the right information at the right time. The opportunity to net may already exist across several counterparties, but when contract information is fragmented between firms, identifying the full chain can still require considerable manual coordination.

That creates an operational problem that experienced trading teams know well. Potential circles can remain unidentified until late in the process, participants spend time comparing positions through emails and bilateral exchanges, and opportunities to simplify execution can be missed simply because the complete picture is not visible soon enough.

Covantis CircleOut was developed to address that visibility gap. It analyses contracts across participating counterparties to identify potential circles and washouts before execution, giving firms a structured way to find opportunities that would otherwise require manual matching across the market.

The principle behind it is straightforward: free up working capital sooner, enable earlier netting, reduce unnecessary cargo movements, and improve cash flow through faster circle and washout resolution.

CircleOut is delivering measurable day-to-day value, with 92% of the maximum score for efficiency and ease of use and 78% of users reporting earlier circle identification.

Moving Circle Identification Beyond Bilateral Visibility

CircleOut brings contract matching, circle identification and resolution into one workflow. Participants can manage their paper contracts on the platform, identify potential circles and washouts, and calculate the resulting settlements once an opportunity is agreed.

The important difference is the breadth of information available to the matching process. A participant may only have direct visibility over its own contractual relationships, while CircleOut can analyse the contracts represented by participating firms across the market and identify connections between them.

This becomes increasingly valuable as participation grows. More contractual information does not automatically translate into more netting, but it gives the matching process a larger set of possible combinations to assess. It also means that potential circles can be prioritised using the contract information available across the platform rather than relying on fragmented bilateral information.

What The Market is Showing in 2026

The first nine months of 2026 continued the strong performance recorded on CircleOut across the paper markets, with growth in uploaded volumes, netted volumes and netting efficiency compared with the same period last year.

Across the five paper markets covered in this update — FOB Dutch Mills, German Lower Rhein, FOB 6 Ports, Paranaguá and Timbúes — 49.8 million MT of contractual volume was represented on CircleOut from January to September 2026. Of this, 23.9 million MT was netted, an increase of 48% compared with the same period in 2025.

The figures show different stages of development across the individual markets. Some are seeing rapid growth in the amount of contractual volume represented, while others are becoming more efficient at identifying and netting opportunities from relatively stable volumes.

In Europe, the three paper markets represented 14.6 million MT of contractual volume, an increase of 24% year on year, while netted volume reached 10.3 million MT, up 35%. Overall netting efficiency across the three markets increased from approximately 65% to 70%.

German Lower Rhein recorded the most significant change. Contractual volume increased by 53%, while netted volume rose by 87%, from 2.8 million MT to 5.1 million MT. Netting efficiency increased from 58% to 70%, showing that growth in the amount of contract data represented has been accompanied by materially stronger netting outcomes.

FOB Dutch Mills remains one of the most efficient markets on CircleOut. Participants netted 3.8 million MT, representing 72% of uploaded contractual volume, with monthly netting efficiency reaching 83% in both May and September. FOB 6 Ports followed a different pattern: uploaded volume was slightly lower year on year, but netted volume still increased by approximately 8%, while efficiency improved from 59% to 66%.

Latin America is developing from a different base but is also showing substantial growth. Across Paranaguá and Timbúes, contractual volume represented on CircleOut increased by approximately 36%, while netted volume rose by 59% compared with the same period last year.

Have a Forward Look at the Next Period

CircleOut continues to see steady engagement from participants ahead of the next contract period. The figures below show aggregate volumes uploaded and netted for the coming periods, covering the next three months for some markets and the next two months for others, and reflect the ongoing commitment of participants across the network to efficient settlement.

For participants, that visibility can help put their own positions into a wider market context. Where more contractual volume is already represented, there may be a broader opportunity set for CircleOut to identify potential combinations as additional contracts enter the platform.

Looking Ahead

Paper markets will continue to be built around bilateral commercial relationships. What is changing is how much information can be brought together around those relationships before execution.

The 2026 results already show the value of that visibility. More contractual volume is being represented on CircleOut, while several markets are also becoming more efficient at converting that visibility into netted positions.

As participation grows, so does the opportunity set available to the matching process. The forward view adds another dimension. Instead of waiting until the end of a contract run to understand what happened, participants can increasingly see where contractual activity is already building and where further opportunities may emerge.

That is where CircleOut goes beyond automation. It is not simply about finding the same circles faster but about giving the market a better chance to identify connections that might otherwise remain unseen.

As participation continues to develop, the most interesting question may not be how much has already been netted, but how much more could be identified when the right contracts are visible at the right time.

Methodology note: CircleOut volume figures include both buy and sell contracts uploaded to the platform.