Platts extends feedback period for alumina incoterm, payment term changes

S&P Global Platts is extending by a month to Oct. 30 the feedback period for the proposed changes in incoterm and payment terms for its alumina assessments.

Platts is proposing to publish its existing China alumina price assessments on a CIF basis, and to change payment terms for all its seaborne alumina assessments to letter of credit (L/C) at sight and cash against documents (CAD) to reflect current standard market practice, effective Dec. 1, 2020.

A subscriber note on the above proposed changes was published on Platts website on Sept.14 and may be viewed on this weblink:

https://www.spglobal.com/platts/en/our-methodology/subscriber-notes/091420-platts-proposes-incoterm-payment-term-changes-for-alumina-assessments

Platts has observed that most of the seaborne alumina delivered to China is now traded on a CIF basis instead of CFR basis, with the current price of insurance estimated at around 10 cents/mt. Should the proposal be implemented, price information reported on a CFR China basis would be normalized to CIF China.

Platts has also noted the evolution of typical payment terms in the global seaborne alumina market from the L/C payable within 30 days and payments within 30 days of bill of lading previously to more prompt payment methods. Under the proposal, CFR China, FOB Australia and FOB Brazil assessments would reflect L/C at sight and CAD. Bids, offers, trades and other price indications on alternative payment terms would be normalized to reflect the proposed standard. Platts currently does not observe a material difference in price between L/C at sight and CAD terms.

Platts assesses CFR China alumina in $/mt, and also publishes the price in Yuan/mt, based on a daily currency conversion rate.

The affected assessments are published on Platts Nonferrous Metals Alert fixed page MTL0005, MTL0650, MTL0678, in Platts Metals Daily, on the Platts Market Center, and in the Platts price database under the codes listed below.

Incoterm change

Current Assessment Title Proposed Title Code Monthly Average Weekly Average Yearly Average

Alumina CFR China Alumina CIF China MMALZ00 MMALZ03 MMALZ04 MMALZ16

Alumina CFR China Yuan/mt Alumina CIF China Yuan/mt MMACA00 MMACA03

Payment term change

Assessment Current Payment Terms Proposed Payment Terms Code Monthly Average Weekly Average Yearly Average

Alumina FOB Australia L/C 30 days, BL 30 days LC at sight and CAD MMWAU00 MMWAU03 MMWAU04 MMWAU16

Alumina CFR China L/C 30 days LC at sight and CAD MMALZ00 MMALZ03 MMALZ04 MMALZ16

Alumina FOB Brazil Differential to FOB Australia L/C 30 days, BL 30 days LC at sight and CAD MMWAD04 MMWAD03 MMWAD16

Please send all feedback, queries and comments to platts_alumina_moc@spglobal.com and pricegroup@spglobal.com by Oct 30, 2020.

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.