Platts proposes to reflect UK specification in its Diesel 10ppm UK Cargoes CIF NWE assessment from Oct. 1 2020

S&P Global Platts proposes to reflect UK specification in its Diesel 10ppm UK Cargoes CIF NWE assessment from Oct. 1, 2020.

This proposal follows on from a consultation period detailed here: http://plts.co/qHY630qMkur

Platts initiated the consultation following an announcement from the British Standards Institution that introduced a concentration limit of 10,000 max for particles of more than 4 microns in diameter per ml in the UK specification of ultra-low sulfur diesel (EN 590), effective from April 30, 2020.

Currently, the assessment of Diesel 10 ppm UK Cargoes CIF NWE (AAVBH00) reflects French specification diesel and is derived as a freight net-forward to the ULSD 10 ppm Cargoes CIF NWE (AAVBG00) assessment based on the incremental freight differential to typical UK ports and using daily freight rates published in the Platts Clean Tankerwire. The freight net-forward also assumes a basket of loadports in the Baltics, Scandinavia and in the Amsterdam-Rotterdam- Antwerp Area.

Platts also currently assesses the daily differential for UK specification diesel, basis Diesel 10 ppm CIF ARA. This differential (code AUKMA00) was introduced on March 2 and reflects the latest BSI standard for EN 590. The subscriber note is available here: http://plts.co/vBuz30qMkv2

Effective October 1, 2020, Platts proposes to amend its Diesel 10ppm UK Cargoes CIF NWE assessment to reflect the value of UK specification diesel delivered into UK ports. The assessment would reflect both bids, offers and trades reported through the Market on Close process, as well as indications gathered from the market.

On April 2, Platts published a further clarification note stating that all bids and offers reported in the CIF Northwest European diesel cargo MOC (basis ARA) must clearly state whether they include a 10,000 max particle guarantee. This note is available here: http://plts.co/AtMQ30qMkvT

Temporary outright UK spec assessment

Ahead of the proposed amendment of the existing Diesel 10ppm UK Cargoes CIF NWE assessment, Platts also proposes to launch an outright value assessment reflecting UK specification diesel at UK ports, effective July 1, 2020, for three months, ending October 1, 2020. The new, temporary assessment will incorporate the UK specification diesel differential as above, and provide a temporary outright value for UK specification diesel as a comparative data point to the existing netback assessment.

As a reminder, S&P Global Platts will host a workshop via webinar on June 4 to discuss the impact of the specification change on the UK ULSD market and potential modifications to the CIF UK ULSD assessment. We invite market participation and please find the registration link here: https://plattsinfo.spglobal.com/UK-ULSD-Technical-Workshop.html

Platts welcomes feedback in light of changing specification and market flows. Please send any comments, questions or feedback by June 29, 2020 to europe_products@spglobal.com and copy 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.