Platts launches daily Japan, Asia low-carbon aluminum premium (LCAP) assessments

Platts, part of S&P Global Commodity Insights, has launched daily low-carbon aluminum premium assessments for Japan and Asia and corresponding all-in calculations based on underlying spot and quarterly contract prices, effective Jan. 2, 2025, following market feedback of growing interest in low-carbon aluminum pricing in the region.

The Japan Low-Carbon Aluminum Premium (Japan-LCAP) and Asia Low-Carbon Aluminum Premium (Asia-LCAP) assessments reflect the spot premium or discount over standard P1020A aluminum for low-carbon aluminum with total certified direct and indirect emissions associated with aluminum smelting, typically considered by market participants as scope 1 and 2 emissions of 4-mt equivalent (mte) or less of CO2 per ton of aluminum.

Japan-LCAP caters to material delivered to Japanese main ports, while Asia-LCAP represents cargoes delivered to the rest of Asia, with Incheon, South Korea as the basis port.

Consistent with Platts' exclusion of Russian material from its CIF Japan Spot Aluminum premium assessment (MMANA00) and CIF Japan Forward Quarter Aluminum premium assessment (AAFGA00), Platts excludes Russian material from its Japan-LCAP assessment and all-in calculations. The Asia-LCAP assessment is open origin, in line with the underlying specifications for Platts CIF Main Asian Ports Spot Aluminum Premium (AAFGG00).

The specifications for the new assessments and calculations can be found below:

The volume specification accounts for typical seaborne shipments via containers and considers feedback that low-carbon aluminum transactions may reflect smaller volumes compared with standard material.

The all-in prices are calculated based on the following formulae:

Japan-LCAP and Asia-LCAP include material with 4 mte or less of CO2/mt certified by an internationally accepted, independent organization. Market participants are expected to supply proof of such certification upon request.

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 these assessments.

Platts first proposed to launch the assessments Nov. 25, building on existing low-carbon aluminum coverage in Europe and the US: https://www.spglobal.com/commodity-insights/en/pricing-benchmarks/our-methodology/subscriber-notes/112524-platts-proposes-to-launch-daily-japan-asia-low-carbon-aluminum-assessments

Following market feedback, Platts communicated its decision to launch the assessments on Dec.18, and the relevant note can be found here: https://www.spglobal.com/commodity-insights/en/pricing-benchmarks/our-methodology/subscriber-notes/121824-platts-to-launch-daily-japan-asia-low-carbon-aluminum-premium-lcap-assessments

Platts spot price assessments consider market information reported to Platts and published throughout the day, including firm bids and offers, transactions and indications, as well as any other data deemed relevant to the assessment process. Market information received before the 4:30 pm Singapore (0830 GMT) timestamp is considered for the assessments.

In the absence of observable spot market activity, Platts may consider other verifiable data reported.

Full aluminum specifications can be found in the Global Nonferrous Metals specifications guide here: /content/dam/spglobal/ci/en/documents/platts/en/our-methodology/methodology-specifications/Global_NonFerrous.pdf

Platts Japan-LCAP and Asia-LCAP assessments and related all-in prices are published in Metals Daily and Metals Weekly, on Platts Metals Alert on fixed pages PMA/MTL0107, PMA/MTL0108, PMA/MTL0419 and PMA/MTL0650, and in the Platts price database.

The Japan-LCAP and Asia-LCAP assessments follow the Singapore holiday schedule and are published on Singapore working days. All-in calculations incorporating LME settlements are published on dates that are working days in both Singapore and the UK. Monthly averages of all-in prices will equal the aggregate of published values only.

The full Platts pricing holiday schedule can be found here: https://www.spglobal.com/commodity-insights/en/pricing-benchmarks/our-methodology/holiday

Please send comments and questions to platts_mjp_moc@spglobal.com and pricegroup@spglobal.com.

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