Platts proposes to launch daily CIF Main Asian Ports P1020 aluminum assessment, spread to CIF Japan forward quarter premium

Platts, part of S&P Global Commodity Insights, is proposing to launch a daily spot P1020 aluminum premium assessment delivered CIF Main Asian Ports (MAP), and a daily calculation reflecting the spread between the new spot premium for CIF Main Asian Ports and the CIF Japan Forward Quarter aluminum premium, effective May 2, 2023.

The new CIF MAP premium would be assessed with South Korea's Incheon port as the basis port. Shipments of P1020 aluminum to all other major Asian ports, excluding Japan, would be considered and may be normalized to Incheon port. This proposal for a new aluminum premium assessments delivered to other Asian ports outside Japan comes after consistent market feedback and observation that there has been a widening gap between Japan import premiums compared with most other markets in Asia. In recent years, the volume of spot trades to Japan has declined, while spot liquidity in the rest of Asia has increased.

Platts also observed that it is common practice for some Asian markets outside of Japan to trade spot aluminum and aluminum products as a differential to the CIF Japan Forward Quarter Premium assessment. The proposed spread calculation between CIF MAP and CIF Japan Forward Quarter Premium would provide more clarity in premium or discount levels for these markets.

Publication of Platts existing CIF Japan spot and quarterly premium assessments would remain unchanged.

The new CIF MAP assessments would reflect the spot market value of P1020 aluminum of all open origins.

The assessments would be published daily as a premium or discount to the prevailing futures cash settlement price for high-grade aluminum. Market close would be 4.30 pm Singapore and assessment publication would follow the Singapore publishing schedule.

The assessments would 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.

Specifications for the proposed Platts CIF MAP Aluminum Premium assessments are:

Calculation and normalization details are:

Origin

Platts appreciates that a significant amount of spot liquidity in Asia, ex-Japan market, consists of any duty-free origin aluminum. Duty-free trades, bids and offers may be normalized to a duty-unpaid standard.

Freight

Platts would consider main ports in northeast Asia for calculation and freight normalization purposes.

For example, Australia origin P1020 aluminum traded at $100/mt on Jan. 24 for February loading, February pricing on CIF Vietnam basis.

Freight between Australia-to-northeast Asia is $10/mt higher compared with Australia-to-Vietnam.

Platts would normalize the trade to $110/mt by considering this freight differential.

Platts invites feedback on this proposal to platts_mjp_moc@spglobal.com and pricegroup@spglobal.com by March 24, 2023.

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.