Platts amends its decision on volume normalization in Asian toluene assessments

Following further market feedback and review, Platts, part of S&P Global Commodity Insights, has amended its decision on volume normalization and prioritization for its FOB Korea Toluene assessment, to be implemented Jan. 2, 2025.

The amended decision aims to reflect market feedback on regional demand for aromatics and a prevalence of cargo sizes across the range of 2,000 mt to 3,000 mt.

Platts will consider cargo sizes ranging from 2,000 mt to 3,000 mt in its assessments, with no prioritization between the two. Market information involving non-standard quantities may still be included, subject to normalization to the standard terms, ensuring consistency and reliability in market evaluations. This adjustment aims to enhance liquidity, transparency and accommodate typical transaction sizes in the Platts assessment process.

Platts' original decision note in October stated it would prioritize larger volumes of 3,000 mt over 2,000 mt in the case of bids crossing offers. Under the revised decision, both 2,000 mt and 3,000 mt cargoes will be treated equally.

All other points stated in the original decision note remain unchanged and will come into effect Jan. 2, 2025.

The original decision note was published on Oct. 3, and is available here https://www.spglobal.com/commodityinsights/en/our-methodology/subscriber-notes/100324-platts-to-implement-changes-to-asian-toluene-assessments-effective-jan-2-2025.

The proposal was published on Aug. 5 https://www.spglobal.com/commodityinsights/en/our-methodology/subscriber-notes/080524-platts-proposes-changes-to-asian-toluene-assessments-effective-jan-2-2025, and was based on the feedback received during an extensive consultation, which Platts initiated on Dec. 22, 2023 here: https://www.spglobal.com/commodityinsights/en/our-methodology/subscriber-notes/122223-platts-seeks-feedback-on-its-asian-toluene-methodology.

Toluene decision note revision for Jan. 2, 2025 implementation:

FOB Korea benchmark

Platts will update the product specifications and cargo sizes, reflected in the FOB Korea assessments, in line with the observed trading practice, and specify their merchantability requirements.

Specification: The assessments will reflect material with a minimum purity of 99.1%. The current methodology refers to ASTM D-841 testing method that specifies only a maximum of 1.2% deviance in the purity levels.

Cargo size: Platts will reflect cargo sizes ranging from 2,000 mt to 3,000 mt in its assessments. Market information involving non-standard quantities may be included, subject to normalization to standard terms, ensuring consistency and reliability in market evaluations. This adjustment aims to enhance liquidity, and transparency and accommodate typical transaction sizes.

Merchantability: The assessment will reflect merchantable cargoes which do not incur additional duties or restrictions when delivered into key consumption markets. For example, Platts understands that a significant quantity of toluene is loaded on an FOB Korea basis and is consistently exported to the US and India.

These changes will affect the price assessments under the following codes: