SUBSCRIBER NOTE: Platts proposes to update US Aluminum Transaction premium methodology

Platts is proposing to update its normalization matrix for its US Aluminum Transaction premium assessment (symbol MMAKE00) to reflect changes in the supply structure in North America, and to reflect larger spot order sizes.

The market has evolved, so the proposed update to the methodology would align with current market practice.

Platts is soliciting feedback through February 6 on the proposed updates which would be adopted into the published methodology effective March 9, 2015.

Platts is proposing to widen the volume for the typical order quantity to 100-1,000 mt from the current 100-500 mt.

The specification would continue to stipulate full 45,000 mt truckloads or multiples thereof in the case of truck deliveries.

Deals that are reported as FOB, FCA, for non-Midwest locations or for particularly close or long freights (i.e., less than/greater than the current range of 2.0-2.5 cents/lb) are normalized before inclusion in the calculations.

Platts uses a matrix of typical delivery locations throughout North America and categorizes these locations as "average," "close" or "extra" freights.

The "close" or "extra" freight locations are normalized to "average" based on assigned differential values of ranging from plus/minus 0.25 cent to 0.5 cent/lb, which are adjusted periodically based on market feedback on typical locational discounts or extras.

Platts proposes to adjust its normalization matrix to reflect the fact that currently the typical consuming locations in the US Midwest are receiving more supply from Detroit and Baltimore warehouse stocks and Canadian imports than from imports flowing into the port of Owensboro or from smelters in the Midwest region.

The Platts aluminum team will give a presentation and hold an open discussion on the proposed methodology changes following the Platts Aluminum Symposium on January 20 at the Westin Kierland Resort in Scottsdale, Arizona.

The session is open to all interested participants free of charge.

Please send all questions and feedback on the proposed methodology change to Karen McBeth, karen.mcbeth@platts.com, with a cc to pricegroup@platts.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.