SUBSCRIBER NOTE: Platts changes increments on Singapore HSFO paper MOC

S&P Global Platts has changed the increments for the Market on Close assessment process for Singapore high sulfur fuel oil derivatives with effect from July 7, 2017.

Platts initially proposed this change in a note published on January 5, 2017, and subsequently extended the feedback period for this proposal until April 28, 2017.

Platts announced it would change the increments for the Market on Close assessment process for Singapore HSFO derivatives through a subscriber note, which was published May 17, 2017: https://www.platts.com/subscriber-notes-details/27831902 For flat price bids and offers, the incrementability has been changed to 5 cents/mt for every 10 seconds and maximum of 50 cents/mt. The previous incrementability for flat price bids or offers for HSFO derivatives was set at a minimum of 25 cents/mt per 30 seconds and a maximum of 100 cents/mt per 30 seconds.

Platts has also with effect from July 7, changed the increment for the MOC assessment process for Singapore HSFO derivatives to a minimum incrementability of 5 cents/mt for every 10 seconds and a maximum of 25 cents/mt for every 10 seconds for timespread and viscosity spread bids and offers.

The previous incrementability for timespread and viscosity spread bids or offers for HSFO derivatives was set at a minimum of 25 cents/mt per 30 seconds and a maximum of 50 cents/mt per 30 seconds.

Platts has noted that typical price movements in the fuel oil derivative MOC process have become more granular over time as market liquidity has increased. Price changes in excess of 50 cents/mt do not test repeatable values at narrower increments that are fully tradeable.

Concurrently, the speed of trade in the fuel oil derivatives process regularly demonstrates the capacity for value to be tested in 10-second periods. Platts typically assesses fuel oil derivative contracts to the nearest 5 cents/mt. The move to reflect this smaller increment allows market participants to demonstrate value to the same level of granularity.

The extension trigger timing remains unchanged. An extension will be triggered by any price move or a re-bid/re-offer in the last 10 seconds prior to the close of the MOC at 16:30:00 Singapore time.

Please send any feedback or questions to asia_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 those not marked as confidential available upon request.