Platts to change US met coal brand assessment pricing basis, laycan, use calculations

S&P Global Platts has decided to use a combination of survey, reference coking coal indexes and value-in-use models to assess Atlantic metallurgical coal relativities, and extend the laycan period for the brands in line with US spot coking coal indexes, effective April 3, 2020.

After further extensive market consultation, Platts decided to launch the methodology change from April 3, 2020, rather than January 3, 2020, as initially proposed.

This is to allow the changes to align with the launch of US coking coal dry basis index specifications and dry basis penalty premia ranges.

In the absence of confirmed bids, offers and transactions, Platts will calculate prices for Beckley, Buchanan and Windber brands, based on the published penalty and premia ranges for US East Coast Low-Vol HCC (AAWWR00) for CSR, moisture, ash and sulfur.

For the Oak Grove, Blue Creek No. 7 and Blue Creek No. 4 brands Platts will have the option to use FOB Australia premium coking coal indexes (PLVHA00 and TS01035) and take into account the forward curve values for typical laycans, which reflects common trading terms for these coals.

Platts will reflect an extended laycan period of 14-60 days, from 14-45 days for all six brand assessments. This is in line with earlier changes to the Platts US hard coking coal assessments’ spot loading laycan to 14-60 days introduced in June 2019.

Additionally, Platts will change the assessment basis for Oak Grove, Blue Creek No.7 and Blue Creek No 4. to FOB Mobile, Alabama, basis, from the current FOB Hampton Roads basis, to align with typical trading practices for the coals.

Platts will continue to publish assessments for the Beckley, Buchanan and Windber brands, and their relative spread to Platts US Low Vol HCC assessments, basis FOB Hampton Roads.

The change would affect the following assessments:

Description Weekly Assessment Monthly average

Met Coal Beckley FOB USEC MCAPD04 MCAPD03

Met Coal Windber FOB USEC MCAPE04 MCAPE03

Met Coal Buchanan FOB USEC MCAPF04 MCAPF03

Met Coal Oak Grove FOB USEC MCAPA04 MCAPA03

Met Coal Blue Creek No. 7 FOB USEC MCAPB04 MCAPB03

Met Coal Blue Creek No. 4 FOB USEC MCAPC04 MCAPC03

The assessments are published in the US Metallurgical Coal Relativities table on page 9 of the Steel Markets Daily publication, page 8 of Coal Trader International publication, and page 6 of Coal Trader publication.

The prices also appear on the real-time Platts Metals Alert page MW1065 and in the Platts database.

The methodology update follows the decision by Platts earlier this year not to discontinue the US brand relativities series and to instead update the methodology.

Platts published that decision on June 28, and the relevant subscriber note can be found here: https://www.spglobal.com/platts/en/our-methodology/subscriber-notes/062819-platts-to-delay-discontinuation-of-atlantic-metallurgical-coal-relativity-table

Please submit any comments or questions to cokingcoal@spglobal.com and pricegroup@spglobal.com.

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