SUBSCRIBER NOTE: Platts to fully reflect index-linked indications in IODEX, TSI-62%

S&P Global Platts will fully reflect index-linked bids, offers and trades in its IODEX (IODBZ00) and TSI-62% (TS01021) price series.

Index-linked trade has grown to become at least equal in number to fixed price trade in the spot market over the last 18 months.

Due to the impending methodology merger of TSI and IODEX, the forward curve of the former will be identical to the latter, meaning that, for indications linked to the January 2018 average of IODEX, Platts will able to price with heightened certainty the fixed price equivalent of these index-linked indications.

Platts first stated index-linked trade would be fully reflected on July 6, 2017, in a subscriber note outlining the merger. As part of the market consultation to merge the two price series, industry participants across the supply chain showed support for the inclusion of index-linked indications. More recently, this support has been reaffirmed.

In order to assess the underlying swap month, Platts may use information from market sources such as exchange trading screens, active market participants' reported trade information and brokers' forward curves.

Just as in Platts' other assessments, the more transparent and firm the data, the more priority it will receive in the data hierarchy -- subject to Platts' editorial guidelines. Platts seeks to value the swap at the time of trade, or at market close if an indication is still live, in order to ensure precision when valuing the underlying swap month.

Due to the nature in which certain brands are commonly index-linked, Platts will stage the inclusion of index-linked indications.

For example, BRBF loaded in Malaysia is often linked to month of loading plus one, and sometimes plus two (M+1 or M+2).

This means that bids, offers and trades of BRBF with relevant November or December laycans can start to be reflected fully in IODEX & TSI-62% immediately, provided they are linked to a January 2018 (or later) assessable index average.

Mainstream brands that tend to price off the month of loading will be fully-reflected at a later date when their loading & pricing periods mesh with Platts' 2-8 delivery window. For Australia-origin brands, some January laycans fit the assessed delivery window from December 1, 2017.

The above also applies to Platts low-grade and high-grade fines price series assessed on a CFR Qingdao basis.

Please submit any feedback, comments or questions to IODEX@spglobal.com; TSIironore@spglobal.com and pricemethodology@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.