Platts proposes aligning FOB USGC Naphtha cargo specifications with CFR Japan

• Platts proposes aligning FOB USGC Naphtha cargo specifications with CRF Japan from September 1
• Platts proposes changing parcel size from current 250,000 barrels to 25,000-40,000 mt.
• Platts proposes new assessment for $/mt differential between FOB USGC cargo and benchmark MOPJ

S&P Global Platts is proposing changing the specifications reflected in its FOB USGC naphtha cargo assessment to mirror CFR Japan naphtha, with effect from September 1, 2020.

Platts is proposing to change the parcel size reflected in the FOB USGC Naphtha cargo assessments (assessment codes: AAXJU00, AAXJP00) from the current 250,000 barrels to 25,000-40,000 mt, with the typical size 35,000 mt. Bids, offers and trades for parcel sizes in this range may be normalized to the typical parcel size for inclusion in the assessment.

Additionally, Platts is proposing a new assessment for the differential in $/mt of the FOB USGC cargo assessment against the CFR Japan naphtha benchmark around load dates. Platts also proposes to start publishing CFR Japan naphtha derivatives at the Houston close for the balance month, month 1 and month 2 contracts, as well as a MOPJ strip reflecting USGC loading dates.

Platts recognizes the naphtha market has evolved into an export market, with focus on product sailing to Asia. In light of evolved market dynamics, Platts is proposing to align its FOB USGC cargo assessment with CFR Japan naphtha specifications, to better connect the US Gulf Coast and Asia markets.

SPECIFICATIONS

The proposed specifications are as follows:

PLATTS CFR JAPAN NAPHTHA SPECS

The current FOB USGC Naphtha cargo assessment reflects the following specifications:

NAPHTHA FOB USGC

LAYCAN

Platts is also seeking feedback on the currently assessed laycan for naphtha cargoes of 7-21 days forward.

Platts understands that naphtha cargoes in the US Gulf Coast are mostly built and blended from barges. Feedback on parameters around the laycan and loading logistics is requested.

Please send any feedback by July 20, 2020, 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.