SUBSCRIBER NOTE: Platts to publish assessments, MOC process for US marine fuel 0.5%S in $/mt

S&P Global Platts will only publish bids, offers and intents to trade for the Platts Market on Close assessment process for marine fuel 0.5% sulfur in the Americas on a $/mt basis effective July 1, 2019.

Platts will continue to publish the existing USGC and USAC assessments for marine fuel 0.5% on a $/b basis, and will derive these assessments by converting the $/mt assessments using the existing conversion rate of 6.35 b/mt.

Platts will continue to review the conversion rate as the market and specifications evolve.

The $/mt code for Marine Fuel 0.5% FOB USGC Barge is AUGMB00 and the code for Marine Fuel 0.5% delivered USAC Barge is AUAMB00. These $/mt assessments, which have been published as Platts data since January 2, 2019, will be added to all relevant Platts publications.

There will be no change to the existing USGC HSFO assessment or any other Platts residual fuel oil assessments in the Americas, which will continue to be published in $/b.

MOC TIMING AND INCREMENTABILITY: In the MOC process, the tradable volume size will be 7,000 mt in both the USGC and USAC. Bids and offers in the MOC process will be able to move a minimum of 25 cents/mt every 30 seconds or a maximum of 50 cents/mt every 30 seconds.

Timing, incrementability and repeatability in the MOC process will have the same standards as the current $/b window for Marine Fuel 0.5% in the USGC and USAC. There will be no freeze in the last minute of the MOC process and an extension will be triggered by a price change or repeat in the last 20 seconds of the window.

Bids and offers published in the MOC process that are expressed as a differential to USGC HSFO, such as a differential to the first month HSFO, will also be in $/mt. These differentials would be considered against a basis converted into metric tons using the associated conversion factor; in the case of USGC HSFO this is stated as 6.35.

BACKGROUND: The changes will ensure that Platts physical assessments and processes more closely align with the end-user market for this fuel. Bunker fuel is typically traded and delivered in metric tons.

As suppliers prepare to meet the new global sulfur limit of 0.5% due to come into force in January 2020, Platts understands that the expected range of fuel densities will be significantly greater than for current marine fuels. Lower-density fuels traded in barrels would result in lower delivered quantity in mass.

Platts launched its $/b assessments for USGC and USAC marine fuel 0.5%S assessments on January 2, 2019, in tandem with similar assessments in Rotterdam, Fujairah and Singapore. All of the non-US assessments for marine fuel 0.5%S are published in $/mt.

Since January, Platts has been publishing bids, offers and intents to trade in the MOC process for USGC and USAC marine fuel 0.5%S on a $/b basis. These bids, offers and intents to trade in $/b will no longer be published effective July 1, 2019.

This change was previously proposed by Platts in a subscriber note published on May 9, 2019. Please send any queries or feedback to americas_products@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.