Platts to launch daily Japan, Asia low-carbon aluminum premium (LCAP) assessments

Platts, part of S&P Global Commodity Insights, will launch daily low-carbon aluminum premium assessments for Japan and Asia, and corresponding all-in calculations based on underlying spot and quarterly contract prices, effective Jan. 2, 2025, following market feedback showing increasing interest in low-carbon aluminum pricing in the region.

Platts first proposed to launch the assessments Nov. 25, building on existing low-carbon aluminum coverage in Europe and the US: https://www.spglobal.com/commodity-insights/en/pricing-benchmarks/our-methodology/subscriber-notes/112524-platts-proposes-to-launch-daily-japan-asia-low-carbon-aluminum-assessments.

The Japan Low-Carbon Aluminum Premium (Japan-LCAP) and Asia Low-Carbon Aluminum Premium (Asia-LCAP) assessments will reflect the spot premium or discount over standard P1020A aluminum for low-carbon aluminum with total certified direct and indirect emissions associated with aluminum smelting, typically considered by market participants as scope 1 and 2 emissions of 4-mt equivalent (mte) or less of CO2 per ton of aluminum.

Japan-LCAP will cater to material delivered to Japanese main ports, while Asia-LCAP will represent cargoes delivered to the rest of Asia, with Incheon, South Korea, as the basis port.

Consistent with Platts' exclusion of Russian material from its CIF Japan Spot Aluminum Premium assessment (MMANA00) and CIF Japan Forward Quarter Aluminum Premium assessment (AAFGA00), Platts will exclude Russian material from its Japan-LCAP assessment and all-in calculations. The Asia-LCAP assessment will be open origin, in line with the underlying specifications for Platts CIF Main Asian Ports Spot Aluminum Premium (AAFGG00).

The specifications for the new assessments and calculations can be found below:

The volume specification accounts for typical seaborne shipment via containers and considers feedback that low-carbon aluminum transactions may reflect smaller volumes compared with standard material.

The all-in prices will be calculated based on the following formulae:

Japan-LCAP and Asia-LCAP will include material with 4-mte or less of CO2/mt certified by an internationally accepted, independent organization. Market participants will be expected to supply proof of such certification upon request.

Trade in aluminum products using offsets to reduce overall emissions profiles, such as credits sourced from voluntary carbon markets, will not be considered for inclusion in these assessments.

Platts' spot price assessments consider market information reported to Platts and published throughout the day, including firm bids and offers, transactions and indications, as well as any other data deemed relevant to the assessment process. Market information received before the 4:30 pm Singapore (0830 GMT) timestamp will be considered for the assessments.

In the absence of observable spot market activity, Platts may consider other verifiable data reported.

Full aluminum specifications can be found in the Global Nonferrous Metals specifications guide here: /content/dam/spglobal/ci/en/documents/platts/en/our-methodology/methodology-specifications/Global_NonFerrous.pdf.

The Platts Japan-LCAP and Asia-LCAP assessments and related all-in prices will be published in Metals Daily and Metals Weekly, on Platts Metals Alert on fixed pages PMA/MTL0107, PMA/MTL0108, PMA/MTL0419 and PMA/MTL0650, and in the Platts price database.

Please send comments and questions to platts_mjp_moc@spglobal.com and pricegroup@spglobal.com.

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