S&P Global Commodity Insights updates MOC guidelines for Asia UCO and UCOME assessments

Platts, part of S&P Global Commodity Insights, is updating guidelines for its Market on Close assessment process for UCO and UCOME in Asia.

The guidelines are aimed at bringing greater clarity and transparency to the assessment process used in assessing the FOB Straits UCO prices. Besides information published in the MOC, S&P Global Commodity Insights editors also engage directly with producers, consumers, traders, brokers and shippers to gather price information.

Platts will publish bids, offers and interest to trade from approved participants in the UCO and UCOME MOC process in line with the following editorial standards and guidelines. For more information on the counterparty review process, please visit https://www.spglobal.com/commodityinsights/en/our-methodologies/market-on-close. Entities that wish to participate in the MOC should contact pricegroup@spglobal.com

Timing and Increments: Buyers and sellers must submit any bids and offers with complete information to S&P Global Commodity Insights editors by phone, instant-message or email before 17:30 Singapore time or 0930 GMT. Only bids and offers that are raised or lowered in increments reflective of standard market movements are considered within the assessment. Currently, Platts will publish improvements in the price of published bids and offers at a maximum increment of $1.00/mt per minute. However, Platts has received feedback that a higher increment of $5/mt may be more reflective of the market and invites further feedback on this point.

No price changes are allowed in the final two minutes of the MOC that concludes at 18:00 Singapore time or 1000 GMT. Buyers and sellers may withdraw their bids or offers at any time during the MOC by communicating the same to S&P Global Commodity Insights editors. Counterparties must clearly communicate their interest to trade a published bid or offer to S&P Global Commodity Insights editors.

Volume and Location: For FOB Straits UCO, Malaysian ports Port Klang and Pasir Gudang server as basis. Volumes of 1-5 kmt UCO are considered and normalized for assessment purposes to 1 kmt for cargoes loading 20 to 40 days ahead of the publication date. The minimum loading rate will be 150 mt per hour for breakbulk cargoes.

For UCOME the location basis is FOB China and CFR Singapore. Volumes of 2.5-10 kmt UCOME are considered and normalized for assessment purposes to 2.5 kmt for cargoes loading 20 to 40 days ahead of the publication date are considered in the assessment process.

Specifications and Sustainability: UCO assessment reflects ISCC[1]Certified, non-origin specific product matching the following quality criteria: FFA 5% maximum, minimum of 50 g iodine per 100 g of used cooking oil, M&I 2% maximum, Sulfur 40 ppm maximum, Wax content 300 ppm maximum.

The UCOME assessment reflects product meeting the EN14214 specification excluding oxidation stability, and allows for sulfur content of maximum 15 ppm, a maximum CFPP of 8 degrees Celsius, a maximum water content of 350 ppm with minimum GHG savings of 87%.

In addition, these assessments would also reflect RED and German (Nabisy) mandate compliant material eligible for UK and Dutch double-counting. All material needs to be traceable and have Right to Audit provided by the seller. The UCO assessment will reflect ISCC-certified material.

Deals, bids and offers to contain information on: Seller, Buyer, Delivery Terms (Port location and Incoterm), Delivery Window, Quantity (in Metric Tonnes), Quality and Sustainability, Price (in $/mt), Credit Terms and Other Terms.

Example format: Platts Asia UCO MOC: "Seller 1" offers at $1,500/mt March FOB Port Klang/Pasir Gudang, Bulk of standard spec UCO, ISCC-certified, Cash against Docs, 1,000mt

GT&Cs: Counterparties are expected to perform on trades reported in the MOC based on typical GT&Cs that have been applied and accepted by both counterparties in the open market. Payment terms are defined as Cash against Docs (CAD), including ISCC certification and POS, or letter of credit at sight, at seller's option.

If an offer is lifted by a buyer during the Platts MOC process, S&P Global Commodity Insights would expect typical GT&Cs and credit terms between both parties 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.

For more information on Platts UCO and UCOME assessment prices and how they are assessed, please visit:

https://www.spglobal.com/commodityinsights/PlattsContent/_assets/_files/en/our-methodology/methodology-specifications/uco_fob_straits_ucome_fob_china_faq.pdf and https://www.spglobal.com/commodityinsights/PlattsContent/_assets/_files/en/our-methodology/methodology-specifications/asia_uco_ucome_moc_faq.pdf

Information on biofuels MOC bids, offers and trades can be seen on Page 0001 of Platts Biofuels Alert (PBF0001), and can be submitted to S&P Global Commodity Insights editors via asia_ags@spglobal.com , ICE Chat: platts_asia_biodiesel, or +65 8201 4630 (Whatsapp or Phone).

Please send any feedback or questions to asia_ags@spglobal.com and pricegroup@spglobal.com

For written comments, please provide a clear indication if comments are not intended for publication by S&P Global Commodity Insights for public viewing. S&P Global Commodity Insights will consider all comments received and will make comments not marked as confidential available upon request.