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Platts proposes to merge TSI and Platts Premium Hard Coking Coal Price Series

  • Platts proposes to align timestamp and data treatment for TSI PHCC and PLV HCC
  • Platts proposes to revise quality specifications of these and related assessments
  • Platts proposes to update quantity, basis port and loading and delivery windows

S&P Global Platts is proposing to merge the TSI Premium Hard Coking Coal FOB East Coast Australia index (TS01034) and the Platts Premium Low Vol HCC FOB Australia assessment (PLVHA00), effective January 4, 2021, and seeks market feedback on every aspect of this proposal.

The proposal comes in response to feedback from market participants supporting simplification of Platts suite of premium coking coal assessments, and further reinforces the robustness of the TSI PHCC index in times of market illiquidity.

Aligning the methodologies would mean that the TSI PHCC and Platts PLV HCC price series would be published as two identical values from the start of 2021. This would have the added benefit of eliminating the basis risk for market participants looking to hedge their PLV HCC-linked physical coking coal exposure via the derivatives contracts settling against the TSI PHCC index.

DATA TREATMENT: Platts proposes to change the TSI PHCC methodology to one also considering indicative bids and offers, mirroring the process used in the Platts PLV HCC assessment. Following periods of reduced liquidity resulting from market events in April 2017, September 2019 and April 2020, Platts has received feedback supportive of such a move. The Platts PLV HCC is assessed according to Market-on-Close principles, taking into account tested transactions, bids, offers and indicative data from a multitude of market participants. The data is prioritized in line with a clear data hierarchy and the process is explained in the accompanying daily rationale. Affected price series: TSI Premium Hard Coking Coal Australia Export FOB East Coast Port (TS01034).

TIMESTAMP: To align the TSI PHCC index with other assessments across metallurgical coal and the ferrous value chain, including iron ore, steel and ferroalloys, Platts proposes to publish it as an end-day value with a timestamp of 5:30 pm Singapore time (0930 GMT). At present, the TSI PHCC index takes into account data reported until 6 pm Singapore time and is calculated as a volume-weighted average. Affected price series: TSI Premium Hard Coking Coal Australia Export FOB East Coast Port (TS01034).

QUALITY: Platts has reviewed the latest quality specifications of premium hard coking coals in the market, and proposes that the Platts PLV HCC assessment adopt the underlying specifications of the TSI PHCC index with minor adjustments to sulfur and phosphorus to 0.55% and 0.040% respectively, from 0.45% and 0.050% currently. Based on Platts evaluation, netted out, these adjustments would not amount to any meaningful value difference for the assessment relative to its previous specifications or relative to the major premium hard coal brands trading in the physical market. Specifically, the proposed specifications are as follows:

CSR
VM ad
TM ar
Ash ad
S ad
P ad
Fluidity
Vit %
Platts PLV
71
21.5
9.7
9.3
0.5
0.045
500
65
TSI PHCC
71
21
10
10
0.45
0.05
600
68
Proposed Specifications
71
21
10
10
0.55
0.04
600
68

Affected price series: TSI PHCC index, the PLV HCC assessment, and other seaborne and port stock assessments that are related to the PLV HCC assessment. The list of affected price series are as follows:

Description
Symbol
TSI Premium Hard Coking Coal Australia Export FOB East Coast Port
TS01034
Premium Low Vol HCC FOB Australia
PLVHA00
Prem Low Vol HCC FOB Australia (China netback)
PLVHD00
Premium Low Vol HCC CFR China
PLVHC00
Premium Low Vol HCC CFR India
PLVHI00
Prem Low Vol Ex-Stock Jingtang
AAWZN00
Prem Low Vol CFR Jingtang Equivalent
AAWZO00
Met Coal Prem Low Vol Import-Port Stock CFR China Differential
PLVHL04

TIMING: Following analysis of spot transaction laycans since January 2019, Platts proposes to change the timing of the Platts PLV HCC assessment to representing cargoes loading 7-60 days forward from the current 7-45 days forward, in line with the loading window of the TSI PHCC index. As is the case in Platts methodology, where a time structure is observed in the physical market, cargoes loading within this loading window are normalized to the mid-window day, in this case the 33rd day forward. Affected price series: Premium Low Vol HCC FOB Australia (PLVHA00) and Prem Low Vol HCC FOB Australia (China Netback) (PLVHD00) assessments. Platts also proposes to change the delivery timing for the assessments with CFR incoterms to delivery in 20-75 days, from the current delivery in 20-60 days. Affected price series: Premium Low Vol HCC CFR China (PLVHC00) and Premium Low Vol HCC CFR India (PLVHI00).

QUANTITY: Platts proposes to change the volume basis of the TSI PHCC assessment to minimum 10,000 mt, in line with the Platts PLV HCC specification, from the present minimum 15,000 mt. The change would accommodate data on cargoes shipped in a single hatch on smaller Panamax vessels. Affected price series: TSI Premium Hard Coking Coal Australia Export FOB East Coast Port (TS01034).

LOCATION: Platts proposes to clarify the location basis of both price series as FOB Hay Point or Dalrymple Bay, Australia, from the existing FOB East Coast Port Australia for the TSI PHCC index and FOB Hay Point, Australia, for the Platts PLV HCC assessment. Cargoes loading from other ports would continue to be reflected, but would be normalized to the stated basis locations. Affected price series: Premium Low Vol HCC FOB Australia (PLVHA00), TSI Premium Hard Coking Coal Australia Export FOB East Coast Port (TS01034), and Prem Low Vol HCC FOB Australia (China Netback) (PLVHD00).

The affected price series are published in SBB Steel Markets Daily, Coal Trader International, on the real-time Platts Metals Alert on fixed pages 1064, 205, 1051, 1062, and in the Platts price database under the symbols mentioned above.

Platts seeks feedback on every aspect of the proposal, including the substance of the methodology changes and the timeline involved. Please send comments, questions and other feedback on these proposals by June 30, 2020 to pl_cokingcoal@spglobal.com, tsimetcoal@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.