Commodity Insights: 45-46Platts® Core Established Benchmarks and Emerging Price Assessments
Constantly evolving to reflect the realities of ever-changing markets
Stewards of Benchmarks
Platts® benchmarks are developed through engagement with participants across global commodity markets.
Public consultations, market forums, and meetings with market participants ensure S&P Global Commodity Insights is at the forefront of evolving unique methodologies to underpin its pricing services.
Platts constantly updates its assessment methodologies to help market participants manage risk around supply, demand, and pricing.
Update on Platts Dated Brent™
The addition of U.S. WTI Midland crude oil into Platts Dated Brent™ and the Brent complex overall marks the largest evolutionary update in more than 20 years. Midland’s inclusion can as much as triple the volume of crude in Platts Dated Brent™, further underpinning the trust held in the world’s leading oil benchmark.
Announced in June 2022, the decision to include Midland crude has been met with strong market approval, illustrated by the methodology being adopted by Intercontinental Exchange in the Brent futures contract and in Shell’s trading terms, the industry-standard governing the Brent forward market.
Oil
| Platts Dated Brent™ |
| Platts Dated Brent™ is the world’s leading benchmark assessment of the value of physical, light North Sea crude oil, including deliveries of WTI Midland from the U.S. Gulf Coast. |
| Platts Dubai® |
| Platts Dubai® is the primary physical market-pricing reference for crude oil delivered to Asian refineries from the Middle East Gulf and has been since the 1980s. |
- Platts Dated Brent™ is seen as a bellwether for the health of the overall oil market and, furthermore, the global economy.
- The vast majority of sour crude oil trading East of Suez is priced against the Platts Dubai benchmark. Deep financial markets are available for hedging using Platts Dubai as settlement.
- As one side of the Brent/Dubai spread, Platts Dubai also provides the key barometer for understanding the relative value of sweet and sour crude oil, which determines crude oil trade flows into the global oil refining system.
LNG
| Platts JKM® |
| Platts JKM® is the LNG (Liquefied Natural Gas) benchmark price for spot physical cargoes referenced in contracts both in Northeast Asia and globally. |
- The market for LNG is becoming more liquid, transparent, flexible, and efficient. Global LNG trade patterns are evolving rapidly. Regional gas prices have converged, and stronger LNG volumes are driving the rise of LNG as a global commodity.
- Platts JKM®, more than a decade old, is the settlement basis of the leading LNG derivatives contracts globally. JKM continues to be used in short-term and spot LNG contracts, and its use in longer-term contracts has rapidly expanded in the last two years.
Metals
| Platts IODEX® |
| Platts IODEX®, which represents the value of medium-grade iron ore with 62% iron content, is the world’s leading benchmark for the steelmaking ingredient. |
- Iron ore prices experienced heightened volatility during 2020 and 2021 and hit an all-time high of $233.1 per ton in May 2021 before sharply correcting.
- Strong steel demand in China and elsewhere combined with seasonally tight supply to drive prices higher in the first half of 2021. Since then, China’s efforts to curb its steel output have crimped demand and sent prices on a downward trajectory.
Platts® benchmarks by S&P Global Commodity Insights have a strong position in mature markets that continue to grow
Platts® Emerging Price Assessments
Providing transparency into markets critical for Energy Transition
Energy Transition
Battery metals
- S&P Global Commodity Insights has daily battery metals price assessments spanning lithium, cobalt, nickel, and manganese sulfate.
- As battery markets move from fixed pricing mechanisms to spot indexation, Platts price assessments provide critical benchmark information to market participants across the supply chain—miners, refiners, manufacturers of cathodes and battery cells, automakers, and consumers.
- In this fast-changing environment, Platts assessments portfolio continues to grow, along with information and insights essential to industry and investor decision-making. S&P Global Commodity Insights’ electric vehicle metal usage data is a key input to the S&P GSCI Electric Vehicle Metals Index.
Carbon
- S&P Global Commodity Insights has a full suite of daily prices covering voluntary carbon credits, compliance carbon allowances, and related information.
- Platts voluntary carbon credit prices are now being used in long-term contracts for supply of credits—demonstrating the market’s embrace of these new benchmarks.
- Platts prices cover a range of carbon markets, including nature-based credits as well as those using technological solutions to reduce or remove emissions. Platts carbon credit prices form the basis for a range of new carbon accounted commodity assessments, including carbon intensity premiums for crude, oil product, LNG, shipping, steel, and aluminum.
Biofuels
- S&P Global Commodity Insights publishes global prices for ethanol, bio-diesel, sustainable aviation fuel, renewable diesel and related markets.
- Many of these prices are used in long-term physical contracts as well as short-term spot trades and financial derivatives.
- Biofuels are a key part of low-carbon fuel standard. As such, biofuels markets are a key part of the Energy Transition, with mandates in key consuming markets driving a steady uptake of fuels whether in the gasoline or diesel markets.
Hydrogen
- S&P Global Commodity Insights has launched Carbon Neutral Hydrogen assessments covering the key future hubs of this growing fuel.
- Platts’ expanding suite of hydrogen assessments currently covers key points in the U.S., Canada, Northern Europe, Japan, and Australia.
- Platts hydrogen prices tie together production, demand, and supply hubs.
Circular Economy
Recycled Plastics
- S&P Global Commodity Insights has been continuously expanding its recycled plastics coverage since the first Platts European R-PET price assessment in 2008, providing much-needed transparency to support the growth of this emerging industry.
- Recycled plastics markets show an increasing disconnect to their virgin equivalents as demand soars and supply has yet to catch up, resulting in a greater need for independent price assessments and market analysis to help participants manage their risk and assess new project feasibility in the traditionally opaque yet fast changing recycled plastics markets.
Waste
- S&P Global Commodity Insights has been continuously expanding its recycled plastics coverage since the first Platts European R-PET price assessment in 2008, providing much-needed transparency to support the growth of this emerging industry.
- These prices represent the start of the recycling journey and the beginning of the commoditization of waste. S&P Global Commodity Insights gives market participants a complete and transparent view of the post-consumer PET and polyolefin used-plastic bale markets in the U.S. and Europe, allowing participants to compare trends, identify arbitrage opportunities, and ensure accountability.
Scrap
- S&P Global Commodity Insights publishes Platts prices for the key grades of ferrous scrap across the globe and a full suite of aluminum scrap prices in the Americas.
- Many of these prices are used in index-linked spot trades and financial derivatives.
- Trade flows in the physical scrap markets are set to evolve rapidly due to stricter emissions targets, as some scrap-generating regions look to restrict export flows to secure supply, while scrap demand from emerging markets grows sharply.
S&P Global Commodity Insights continues to expand its Platts® price assessments in emerging and new markets