Subscriber Note: Platts to amend USGC-China VLCC freight rate

S&P Global Platts will provide greater specificity to its lump sum 270,000 mt VLCC US Gulf Coast-China freight assessment by defining a disport basis of Ningbo on the central China coast, with effect from June 10, 2019. Platts first proposed this amendment in a subscriber note published April 26, 2019 (https://www.spglobal.com/platts/en/our-methodology/subscriber-notes/042619-p latts-proposes-to-amend-usgc-china-vlcc-freight-rate).

Platts understands that spot fixtures on the VLCC USGC-China route are typically negotiated basis a Ningbo discharge.

In addition, Platts has observed increasing crude exports from the US Gulf Coast to South Korea, with South Korean disports indicated at par with a Ningbo discharge. According to trade flow data, in 2018, half of US crude exports to Northeast Asia were destined for China and close to a third were shipped to South Korea. During Q1 2019, Chinese disports decreased to a quarter of all US crude exports to NE Asia, with South Korea?s share increasing to almost 40%.

Under the proposed change, Platts will continue to reflect all spot market data on the VLCC USGC-China dirty tanker route, but fixtures will be normalized to a Ningbo disport basis.

The affected assessments are: Assessment name Code Dirty USGC-China VLCC 270kt Lumpsum TDUCB00 Dirty USGC-China Lumpsum MAvg TDUCB03 Dirty USGC-China VLCC 270kt $/mt TDUCA00 Dirty USGC-China VLCC 270kt $/mt MAvg TDUCA03

These assessments appear on Platts Global Alert page 1972, on Platts Shipping Alert page 2440, in the Dirty Tankerwire and in the Platts price database under the codes above.

Please send any comments or questions to shipping@spglobal.com and pricegroup@spglobal.com

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