Platts extends feedback period for proposal to introduce MOC timing, increments guidelines for PLV FOB Australia metallurgical coal

Platts, part of S&P Global Commodity Insights, is extending the feedback period for its proposal to introduce timing and increment guidelines for its premium low vol (PLV) FOB Australia metallurgical coal Market on Close assessment process, to Jan. 23, 2023. The proposed implementation date is now Feb. 24, 2023.

Platts initially proposed the timing and increments guidelines on Dec. 9, available here https://www.spglobal.com/commodityinsights/en/our-methodology/subscriber-notes/120922-platts-proposes-to-introduce-moc-timing-increments-guidelines-for-plv-fob-australia-metallurgical-coal.

Following initial market feedback, Platts now also proposes to update the volume specification stated in the above guidelines, to "in accordance with the latest Global Metallurgical Coal Specifications Guide" from "minimum cargo size of 10,000 mt."

The proposed guidelines aim to bring greater clarity and transparency to the assessment process amid increased market interest in submitting firm, transparent data for consideration in the PLV FOB Australia price assessment. Fully verifiable, transparent information that includes the identities of buyers and sellers, in addition to price, volume, location and stated trading terms, is ranked highest in Platts hierarchy of data and given the greatest priority when determining a final market assessment.

Platts MOC guidelines are a key component of its assessment methodology, essential to an orderly and transparent publishing process. For PLV FOB Australia, Platts would publish named bids, offers and interest to trade from approved participants in the MOC process in line with the following proposed guidelines:

Timing and increments

To ensure sufficient time for all market information to be tested, buyers and sellers must submit any bids and offers with complete information to Platts editors by phone, instant message or email before 1700 Singapore time or 0900 GMT.

Only bids and offers that are raised or lowered in reasonable increments are considered for the assessment. Counterparties can improve the price of their published bids and offers every five minutes, by a minimum increment of $1/mt and a maximum increment of $2/mt. No price changes are allowed in the final five minutes of the MOC process that concludes at 1730 Singapore time or 0930 GMT. Buyers and sellers may withdraw their bids or offers at any time during the MOC by communicating the same to Platts editors. Counterparties must clearly communicate their interest to trade a published bid or offer to Platts editors.

Platts may notify the market of any adjustment to incrementability in the event of market volatility or a disruptive event.

Specifications, GT&Cs

Transparent bids, offers and interest to trade would be published in line with Platts existing specifications for PLV FOB Australia:

Volume: In accordance with the latest Global Metallurgical Coal Specifications Guide.

Basis port: Hay Point, Australia

Quality: Premium low vol hard coking coal. Premium mid vol bids and offers may be considered for publication subject to normalization to PLV.

Platts full metallurgical coal assessment specifications are available here: https://www.spglobal.com/commodityinsights/PlattsContent/_assets/_files/en/our-methodology/methodology-specifications/global_metcoal.pdf.

GT&Cs: Counterparties are expected to perform on trades reported in the MOC based on typical GT&Cs and credit terms that have been applied and accepted by both counterparties in the open market. If an offer is lifted by a buyer during the Platts MOC process, Platts would expect typical GT&Cs and credit terms between both parties to be applicable, even where the GT&Cs and credit terms stated in the originally published offer may differ, if the companies have not conventionally performed on the published terms.

Platts applies objective criteria to review entities that wish to participate in the transparent MOC process and monitors all MOC participants to ensure that input data provided by these entities reflect typical market trading practices and standards. For more information on the counterparty review process, please visit https://www.platts.com/market-on-close. Entities that wish to participate in the MOC should contact pricegroup@spglobal.com.

Please send your feedback on the proposed timing and increment guidelines by Jan. 23 to PL_CokingCoal@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 upon request.