Platts seeks feedback on consideration of Russian-origin material in global aluminum assessments

Platts, part of S&P Global Commodity Insights, is seeking feedback on the consideration of Russian-origin material in its global aluminum spot price assessments.

In recent weeks, Platts has observed that an increasing number of market participants are now restricting material from Russia, in part or entirely, in their spot aluminum trading activity. In the European and US markets, Platts understands that while Russian product continues to flow, it may not be trading on the same basis as product from other origins and that there can be a difference in value between Russian and non-Russian product.

At the same time, the London Metal Exchange has conducted a market consultation regarding the inclusion of Russian material in its warehouses and cash-settled pricing. Platts aluminum premiums are assessed as a differential to the LME's daily cash-settled aluminum price.

Platts is seeking feedback on whether the basis definition of "open origin" for its aluminum assessments should continue to include Russian-origin material, or whether it should reflect the move of some in the market to exclude the trading of Russian material.

Unless otherwise stated, Platts aluminum assessments currently reflect open-origin or Western-origin basis aluminum, which could potentially include Russian-origin supply. Platts assessments reflect primary, minimum 99.7% P1020 aluminum in the Americas, Europe and Asia and Platts additionally assesses 6060/6063 aluminum billet in Europe and 6063 billet in the US. All Platts assessments reflect merchantable commodities.

Platts is seeking feedback by region on the origin specifications for its global aluminum assessments as follows:

- US: Assessments reflect any-origin material, premium and transaction prices additionally specify LME deliverable

- Brazil: Assessments reflect any-origin material

- Europe: Assessments reflect Western-origin, also stated as Good Western-origin, LME deliverable; low-carbon and zero-carbon assessments mirror these specifications

- Asia: Assessments reflect Good Western-origin material, and exclude Iran, India and Egypt

Platts is additionally seeking clarity on whether participants in these markets are adopting a unified stance with regard to Russian-origin material.

Full methodology and specifications can be found here: https://www.spglobal.com/commodityinsights/PlattsContent/_assets/_files/en/our-methodology/methodology-specifications/global_nonferrous.pdf

Please send all feedback, comments and questions by December 1 to Platts_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.

Sanctions guidance

As part of its global aluminum consultation, Platts wishes to remind participants in its price assessment processes of current published guidance regarding sanctions, embargoed material, statements around materials origin, and merchantability.

Platts only considers in its assessments commodities that are merchantable. Hence, buyers may assume that offers or transactions are for a commodity that is merchantable. Sellers must ensure their offers or transactions are for merchantable commodities. Merchantability may pertain to subsequent shipping and logistical issues for delivery and marketing of product.

Laws stating that nationals from specific countries may not buy products from embargoed countries may prevent market participants from lawfully executing transactions. A seller, therefore, may not assume that a buyer has the obligation to buy embargoed materials. Under Platts assessment guidelines, commodities supplied from countries or entities that are subject to trading embargoes and sanctions recognized under international law should not be delivered against transactions concluded during the MOC assessment processes.

Bids and offers for delivered material that contain statements surrounding origin may be considered by Platts for publication. Platts may not publish such statements if an origin exclusion is deemed unperformable or overly restrictive. Conversely, such indications may also not be published if the exclusion is implicit in the prevailing market standard. If published after review, origin exclusions may be subject to normalization in value.

This guidance is published online in Platts Assessments Methodology Guide at https://www.spglobal.com/platts/plattscontent/_assets/_files/en/our-methodology/methodology-specifications/platts-assessments-methodology-guide.pdf, and can be found on pages 7 & 8.