Platts to reflect only non-sanctioned methanol in its CFR China assessment

Following extensive market consultation and feedback, S&P Global Platts will reflect only non-sanctioned material in its CFR China methanol assessment, effective Jan. 3, 2022.

Platts first proposed the change in a subscriber note published on March 24, 2021: https://www.spglobal.com/platts/en/our-methodology/subscriber-notes/032421-platts-proposes-to-reflect-non-sanctioned-methanol-in-its-cfr-china-assessment

Platts assessments aim to reflect the market value of widely tradable material. Platts understands that individual companies may have trading limits with counterparties and that national legislation may prevent companies from dealing in materials of certain origins which includes embargoed material.

As of March 2021, there are international sanctions on methanol supplies from countries including Iran and Venezuela. After the change, Platts will no longer reflect trades of these supplies within its CFR China methanol assessment.

Platts will continue to collect, verify and publish price information pertaining to these supplies, clearly stating its origin, and may normalize it to the standard for assessment purposes.

Platts CFR China assessment currently encompasses all spot methanol trade in the market, irrespective of origin. As a result, the assessment represents both embargoed and non-embargoed material.

In recent months, Platts has observed the emergence of price differences between embargoed and non-embargoed material traded into China, with sanctioned material trading at increasingly larger discounts to the rest of the market.

Methanol supplies from Iran and Venezuela form a part of the trade in Asia's markets in general and into China specifically. This supply flow affects overall market fundamentals through displacement of more widely tradable product.

Platts recognizes that the change in methodology could have a significant impact on the values of this globally-referenced benchmark. Therefore, Platts has decided on a long implementation period, in order to provide sufficient time for market participants to adapt to the change.

All other assessment methodology parameters for methanol CFR China will remain unchanged. The assessment will continue to reflect clip sizes of 5,000-10,000 mt with minimum purity of 99.85%, maximum water content of 0.1% by total weight and maximum ethanol content of 50 ppm, for delivery 20-50 days forward from date of publication into Nantong, Taicang, Jiangyin, Zhangjiagang and Ningbo.

Credit terms will remain basis L/C 60-90 days. For deals with non-standard usance, the value of the extra credit allowance will be factored out for price assessment. The assessment takes into consideration latest information sourced from the market up to close of the assessment window at 4:30 pm Singapore time (0830 GMT) and follows the Singapore publishing schedule.

Current Platts Asia Methanol specifications can be found in page 15 of the methodology document here: http://plts.co/X1yT30rBzQZ

Platts CFR China methanol assessments appear in the Petrochemical service on the Platts Platform, in Asian Petrochemicalscan, Solventswire publications, on Platts Petrochemical Alert pages 653, 348, 449 and under the following price database symbols in Platts Market data: AAWAZ00, AAWAZ04, AAWAZ03.

Please send all feedback or questions to petchems@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.