Platts launches daily US low-carbon primary aluminum price assessment

Platts, part of S&P Global Commodity Insights, has launched a new daily low-carbon primary aluminum price assessment for the US market, effective Jan. 2, 2024.

The new US Low-Carbon Aluminum Premium (US-LCAP) reflects any differential achieved for the spot trade of minimum 99.7% high-grade P1020 with total certified emissions of 4-mt equivalent (mte) or less of CO2 per mt of aluminum.

Platts first announced its intent to launch the assessment on Nov. 14 via a subscriber note available here.

Following market feedback, Platts clarified its description of emissions in scope for the new assessment in a Dec. 15 subscriber note published here.

US-LCAP, which complements low-carbon primary aluminum and billet assessments previously launched by Platts in Europe, covers direct and indirect emissions associated with aluminum smelting, typically considered by market participants as Scope 1 and 2 emissions.

Emissions must be certified by an internationally accepted, independent organization. Market participants are expected to supply proof of such certification upon request. Platts continues to invite feedback regarding certifiers currently working with aluminum producers and the industry, as well as feedback on guidelines for a transparent publication process.

Trade in aluminum products using offsets to reduce overall emissions profiles, such as credits sourced from voluntary carbon markets, are not considered for inclusion in this assessment.

The US-LCAP reflects any differential achieved for low-carbon P1020 over standard P1020 aluminum. Published as a standalone value in cents/lb, the US-LCAP also is applied to two existing daily all-in transaction prices to create two new daily low-carbon all-in transaction prices US-LCAP Transaction (All-in) and US-LCAP All-in (Basis CME).

The US-LCAP Transaction (All-in) is the sum of the existing Aluminum US Transaction (All-in) price (MMAAF10) plus the US-LCAP. The US-LCAP All-in (Basis CME) is the sum of the existing Aluminum US All-in (Basis CME) price (ALINA00) plus the US-LCAP.

The Aluminum US Transaction (All-in) price is the sum of the US Midwest Aluminum Transaction Premium (MMAKE00) and the daily LME high-grade aluminum cash settlement price.

The Aluminum US All-in (Basis CME) price is the sum of the US MWP (MMAKE00) and the daily COMEX physically delivered Aluminum (ALI) price.

The US-LCAP assessment reflects the following primary aluminum specifications:

Platts observes direct market activity as well as the effect of movements in related markets through spread differentials, for example. In the absence of observable spot market activity, Platts may consider other verifiable data reported.

Platts has previously introduced low-carbon aluminum and carbon-accounted steel assessments in alignment with S&P Global Commodity Insights strategic focus on offering ESG-related commodities pricing. The assessments respond to requests from market participants for tools to help quantify cost and manage risks and opportunities associated with a growing focus on carbon-reduction strategies and increasing global regulation.

Platts US-LCAP assessment and related all-in prices are published in Metals Daily, Metals Weekly, on Platts Metals Alert on fixed page PMA 412 and in the Platts price database.

Please send any comments to Platts_Aluminum@spglobal.com and pricegroup@spglobal.com. For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing. Platts will consider all comments received and will make comments not marked as confidential available to the public upon request.