Platts clarifies US aluminum MOC guidelines, 3 pm ET cut-off for bids and offers

Platts, part of S&P Global Commodity Insights, would like to clarify the timing and increment guidelines for the Market on Close assessment process for US aluminum, including its benchmark Aluminum MW US Transaction Premium assessment, because of increased interest expressed by market participants in publishing transparent bids, offers, and intentions to trade.

The MOC process guidelines for aluminum last updated in March aim to bring transparency, clarity, and order to the publication process for Platts price assessments.

Platts endeavors to publish all information received that meets editorial standards so that the market at large has sufficient time to see and test it. Fully verifiable, transparent information that includes the identities of buyers and sellers, in addition to prices, volumes, location, and stated trading terms is ranked highest in the hierarchy of data and given the greatest priority when determining a final market assessment.

Following market feedback and to facilitate an orderly publishing process, from Nov. 1, Platts will apply MOC timing and increments to all firm bids and offers submitted to Platts for publication in the US aluminum assessment process. Unnamed bids and offers will be expected to follow the guidelines currently applicable to fully transparent bids and offers.

MOC guidelines are outlined below and summarized here.

3 pm cut-off for new bids and offers

To ensure sufficient time for all market information to be tested, market participants are requested to submit firm bids or offers with complete information to Platts editors by phone, instant message, email, or through the CME Chat Tool prior to 3 pm (1500) US Eastern Time. No new bids or offers will be accepted after 3 pm ET. Between 3 pm and 4 pm ET, participants may improve the price of their published bids and offers every five minutes, by minimum increments of 0.05 cent/lb and maximum increments of 0.25 cent/lb. No price changes will be allowed in the final two minutes of the MOC, which concludes at 4 pm ET.

Participants may withdraw their bids or offers at any time during the MOC by communicating that to Platts editors, so long as an interest to trade against the published bid or offer has not already been received. Counterparties must clearly communicate their interest to trade a published bid or offer, and counterparties are expected to promptly report resultant confirmed transactions in writing.

Bids or offers that are traded in the MOC may be repeated at the same or less competitive price; participants will have five minutes to do so. If a repeat or order change happens in the last 60 seconds before the close, that triggers an extension state. The extension state will last two minutes to ensure that any last-minute change can be fully tested by the market at large.

Platts will publish bids, offers, and interest to trade from recognized participants in US aluminum, in line with the editorial standards and guidelines outlined in the assessment methodology guide found here.

For more information on Platts MOC publishing principles, please visit our methodologies.

MOC submissions require clarity

Platts editorial processes require full clarity when communicating bids/offers and intentions to trade.

As a general recommendation, Platts advises market participants not to wait for the last possible minute before the cut-off deadlines for bids and offers, as the communication may not be completed on time. Bids and offers submitted on time but in an incomplete form, where the terms are only clarified after the cut-off deadline, will not be used in the assessment process.

When expressing an intention to hit a bid or lift an offer in the MOC process, any message should typically include the specific price of the trade. Information may not be published if it is not sufficiently clear when communicated to Platts. In the event of a trade, should the buyer or seller wish to rebid or reoffer, they should expressly state their intention to do so to Platts within five minutes of the initial trade, otherwise it will presume the original buyers or sellers are not there for additional volumes.

A rebid or reoffer must match initial positions parameters, with the exception of price. A rebid or reoffer can be made at the same level or inferior to the traded price. For example, Company B hits Company A's bid for 30 cents/lb during the MOC process. Company A can rebid at 30 cents/lb or below this level.

Platts tracks trade performance and will take appropriate steps to ensure the integrity of its assessments if issues of non-performance should arise. In summary, performance is paramount and all bids and offers must be firm and transactions should be performable within the contractual parameters.

MOC participants should state the terms of payment in their bid or offer at the time of submission. Counterparties are expected to perform on trades reported during the MOC process based on typical GT&Cs and credit terms that have been applied and accepted by both counterparties in the open market. If an offer is lifted by a buyer during the Platts MOC process, typical GT&Cs and credit terms between both parties would be expected to be applicable, even where the GT&Cs and credit terms stated in the originally published offer may differ, if the companies have not conventionally performed on the published terms.

Platts may publish bids, offers, and trades with atypical pricing terms, including timing. Bids and offers which are deemed atypical relative to the market may not be fully taken into consideration for the assessment process.

Entities interested in being reviewed for participation in the transparent Platts MOC assessment process should email pricegroup@spglobal.com for further discussion.

Please send all feedback, comments, and questions regarding the Platts aluminum MOC to aluminum@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.