In light of changing trading patterns in Europe's low sulfur fuel oil market, S&P Global Platts will reflect LSFO where the material has been assigned Combined Nomenclature (CN) code 2707 9999, effective May 1, 2019.
Platts European and Mediterranean assessments currently reflect LSFO where the material has been assigned CN code 2710 1964, but there has been growing evidence that the CN code 2707 9999 has become the more fungible designation.
From May 1, in instances where a seller intends to deliver a fuel with a CN code other than 2707 9999, the seller must specify this CN code in the terms of any offer provided for publication. Buyers providing bids for publication by Platts must be willing to accept fuel with the CN code 2707 9999.
Platts will publish bids in which the buyer specifies that they will also accept CN code 2710 1964 but Platts would not publish bids for fuel with a CN code 2710 1964 designation only, as this may be unduly restrictive in nature. In instances where the CN code used has a material effect on LSFO value, Platts may normalize offers of fuel with CN code 2710 1964.
CN codes, which are designated by and subject to the approval of customs authorities within each EU member country, are an important component of settling tariffs and taxes for products including LSFO within the EU. LSFO of identical specification may be classified using either of two, existing CN codes. The choice of code may vary between customs authorities in Europe, and the choice may affect LSFO merchantability.
The decision follows a proposal note published by Platts on March 25, 2019, which can be viewed at:
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