Platts to merge TSI and Platts Premium Hard Coking Coal Price Series

• Assessment merge effective April 1, 2021
• Platts to align timestamp and data treatment, revise quality specifications and update quantity, basis port and loading and delivery windows
• The two daily assessments will have the same specifications and methodology, and will be published with the same value

Following industry feedback, S&P Global Platts has decided to merge the TSI Premium Hard Coking Coal FOB East Coast Australia index (TS01034) and the Platts Premium Low Vol HCC FOB Australia assessment (PLVHA00), effective April 1, 2021.

The decision follows market feedback received for a first proposal published May 22 (http://plts.co/CzN430qVcSJ), and a second updated proposal published July 7 (https://bit.ly/3hzEU7Z).

The majority of feedback received from market participants was supportive of the proposed merger of the TSI PHCC and Platts PLV indices, which aims to simplify Platts suite of premium coking coal assessments, and further reinforce the robustness of the TSI PHCC index in times of market illiquidity. Aligning the methodologies will mean that the TSI PHCC and Platts PLV HCC price series will be published as two identical values from April 1, 2021. This will have the added benefit of eliminating the basis risk for market participants looking to hedge their PLV HCC-linked physical coking coal exposure via derivatives contracts settling against the TSI PHCC index. Platts received widespread feedback from all segments of the market and geographies, including during open webinars run for the purpose of explaining the proposal.

DATA TREATMENT: The newly merged assessments, which will follow Platts Market-on-Close principles, will reflect repeatable market value at the close of the assessment process, after incremental market testing. Platts tracks market price evolution during the entire day, and publishes a wide range of data relating to market value, including firm bids and offers, transactions and indicative values Transparent data is prioritized in the assessment process, because it is available to the entire market for testing. The full description of the Platts assessments methodology and data hierarchy can be found here: /content/dam/spglobal/ci/en/documents/platts/en/our-methodology/methodology-specifications/Platts-Assessments-Methodology-Guide.pdf

Affected price series: TSI Premium Hard Coking Coal Australia Export FOB East Coast Port (TS01034).

TIMESTAMP: To align the TSI PHCC index with other assessments across metallurgical coal and the ferrous value chain, including iron ore, steel and ferroalloys, the index after alignment will represent an end-day value with a timestamp of 5:30 pm Singapore time (0930 GMT). At present, the TSI PHCC index takes into account data reported until 6 pm Singapore time and is calculated as a volume-weighted average. Affected price series: TSI Premium Hard Coking Coal Australia Export FOB East Coast Port (TS01034).

QUALITY : Platts will revise the specifications of its merged assessments to better align them with the current specifications of premium low-vol hard coking coals in the physical market. These changes can be seen in the table below. Based on Platts evaluation, the new specifications do not amount to any meaningful value difference for the assessment relative to its previous specifications or relative to the major premium hard coking coal brands trading in the physical market. All premium mid-vol hard coking coals will continue to be assessed and normalized to the Platts defined PLV benchmark specification.

Affected price series: TSI PHCC index, the PLV HCC assessment, and other seaborne and port stock assessments that are related to the PLV HCC assessment. The list of affected price series is as follows:

Description Symbol

TSI Premium Hard Coking Coal Australia Export FOB East Coast Port TS01034

TSI Prem JM25 Coking Coal China Imports CFR Jingtang Port TS01044

Premium Low Vol HCC FOB Australia PLVHA00

Prem Low Vol HCC FOB Australia (China netback) PLVHD00

Premium Low Vol HCC CFR China PLVHC00

Premium Low Vol HCC CFR India PLVHI00

Prem Low Vol Ex-Stock Jingtang AAWZN00

Prem Low Vol CFR Jingtang Equivalent AAWZO00

Met Coal Prem Low Vol Import-Port Stock CFR China Differential PLVHL04

TIMING: The timing specification of the Platts PLV FOB Australia assessment will be adjusted to represent cargoes loading 7-60 days forward from the current 7-45 days forward, in line with the current loading window of the TSI PHCC index. As is the case in Platts methodology, where a time structure is observed in the physical market, cargoes loading within this loading window are normalized to the mid-window day, in this case the 33rd day forward. The change will better align with typical loading timings in the physical spot market and increase overall liquidity eligible for inclusion in the assessment. Affected price series: Premium Low Vol HCC FOB Australia (PLVHA00) and Prem Low Vol HCC FOB Australia (China Netback) (PLVHD00) assessments. Platts will also change the delivery timing for the assessments with CFR incoterms to delivery in 20-75 days, from the current delivery in 20-60 days. Affected price series: Premium Low Vol HCC CFR China (PLVHC00) and Premium Low Vol HCC CFR India (PLVHI00).

QUANTITY: The volume basis of the TSI PHCC assessment will be set at minimum 10,000 mt, in line with the Platts PLV HCC specification, from the present minimum 15,000 mt. Affected price series: TSI Premium Hard Coking Coal Australia Export FOB East Coast Port (TS01034).

LOCATION: Platts will define the location basis for the TSI PHCC index as FOB Hay Point, Australia, in line with the existing Platts PLV HCC assessment. The port of Hay Point includes the two terminals of HPCT and DBCT. Cargoes loading from other ports will continue to be reflected, but will be normalized to the stated basis location. Affected price series: TSI Premium Hard Coking Coal Australia Export FOB East Coast Port (TS01034)

PREMIUM MID VOL: Following market feedback, Platts has decided not to launch a new premium mid-vol assessment at this point. Platts currently publishes daily assessments of a number of mid-vol brands, namely Goonyella, Illawarra, Moranbah North, Goonyella C, Peak Downs North and Riverside. According to market participants, these existing brand assessments (also known as relativities) already serve as an accurate and transparent price reference for the premium mid-vol segment of the market. Platts remains open to market feedback and continues to review the relevance of any additional mid-vol assessments.

The realigned assessments will be published in SBB Steel Markets Daily, Coal Trader International, on the real-time Platts Metals Alert on fixed pages 1064, 205, 1051, 1062, and in the Platts price database under the symbols mentioned above.

Please send any feedback, comments or questions to pl_cokingcoal@spglobal.com, tsimetcoal@spglobal.com and pricegroup@spglobal.com.

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