Platts to update UCO assessment specifications and MOC guidelines

Platts, part of S&P Global Commodity Insights, has decided to update some of the terms and specifications reflected in its assessment of UCO FOB Straits and FOB China with effect from Jan. 26, 2023.

Platts has received feedback from market participants that the volume specification reflected in its UCO FOB Straits assessment was too low and did not reflect standard trading volume.

Therefore, Platts initially proposed to update its UCO FOB Straits (UCFCC00) volume specification from "1,000-5,000 mt, normalized to 1,000 mt" to "3,000-5,000 mt, normalized to 3,000 mt".

However, upon receiving additional feedback, Platts has decided to update the volume to "2,500-5,000 mt, normalized to 2,500 mt".

Platts also received feedback that the standard quality specifications for China UCO have evolved to a maximum moisture and impurities at 2%, with no variation for summer specifications.

Therefore, Platts proposes to update part of its UCO North Asia (AUCOC00) product purity specification from "a maximum of 2% MIU (or a maximum of 3% from May 16 to August 15 to reflect summer spec)" to "a maximum of 2% MIU".

Platts has decided to also update the specifications to reflect wax content of maximum 300ppm, based on market feedback.

Furthermore, based on overwhelming market feedback, Platts has decided to reflect cargoes loading from main ports located in East China region in its China UCO (AUCOC00) assessment.

Platts would also like to clarify that its UCO assessments FOB North Asia and FOB Straits reflect ISCC-certified and RED-compliant material.

Additionally, Platts would like to clarify that FOB Straits UCO assessment includes Pasir Gudang and Singapore terminals.

Loadings from Port Klang may also be reflected in the assessment but may be normalized for assessment purposes.

Separately, based on widespread market feedback, Platts has decided to update its MOC Timing and Increments Guidelines for UCO and UCOME to "a minimum of $1.00/mt and a maximum of $5.00/mt per minute", from "a maximum of $1.00/mt per minute".

In addition, Platts has decided to amend the payment terms for its UCO FOB Straits assessment (UCFCC00) from "Cash against Docs (CAD), including ISCC certification and POS, or letter of credit at sight, at sellers option" to "standard payment terms", based on market feedback.

Platts expects nomination standards for trades reported in the FOB Straits and China UCO MOC to reflect standard market terms, as agreed between counterparties.

Platts first proposed the update for its Asia UCO assessments on Nov 29, available at https://www.spglobal.com/commodityinsights/en/our-methodology/subscriber-notes/112922-platts-proposes-to-update-uco-assessment-specifications-and-moc-increments

Platts first communicated its MOC guidelines for Asia UCO and UCOME assessments on Sept. 13, available at https://www.spglobal.com/commodityinsights/en/our-methodology/subscriber-notes/091322-s-p-global-commodity-insights-updates-moc-guidelines-for-asia-uco-and-ucome-assessments

Platts will continue to review these specifications as the market continues to evolve, including during its annual review of the Global Biofuels methodology guide.

Please send any comments, feedback or questions to asia_ags@spglobal.com and pricegroup@spglobal.com.

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