42-43Core Established Benchmarks
Stewards of Benchmarks
S&P Global Platts benchmarks are developed through engagement with participants across the global commodity markets. Public consultations, market forums, and thousands of bilateral meetings ensure S&P Global Platts is at the forefront of evolving unique methodologies to underpin its pricing services.
S&P Global Platts constantly updates its assessments to reflect the realities of ever-changing physical markets and to help market participants manage risk around supply, demand, and pricing.
Evolution of Dated Brent Crude Oil Benchmark
To reflect the evolution of oil pricing in the North Sea, effective October 1, 2019, S&P Global Platts will reflect competitive offers for any of the five North Sea grades reflected in the Dated Brent basket (Brent, Forties, Oseberg, Ikofisk, and Troll) on a CIF Rotterdam-basis in its Dated Brent crude oil benchmark.
Dubai 1st Line Future
|Dubai 1st Line Future is a monthly cash-settled future based on the Platts daily assessment price for Dubai Crude.|
|Platts Dubai refers to the physical spot price of Middle East crude oil loading through the month of assessment. The Dubai price 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. With deep markets available for hedging, and a solid track record as the sour crude benchmark of choice east of Suez, Dubai’s importance has grown. In early 2019, one of our key exchange partners, ICE, moved its Dubai futures contract into a portfolio that brings more attention to the contract from an even wider audience in the derivatives markets, boosting the visibility and hedging activity around this Platts-settled contract.|
Suite of Products for North American Natural Gas
|S&P Global Platts publishes a suite of daily and monthly price indices for North American natural gas in the United States, Canada, and Mexico.|
|The strategic natural gas agreement with Intercontinental Exchange has strengthened S&P Global Platts benchmark daily and monthly volume weighted average indices. The inclusion of Intercontinental Exchange trades in S&P Global Platts indices has increased the percentage of physical daily and physical monthly trades available to S&P Global Platts for its North American natural gas indices significantly, allowing for even more robust indices than using only the physical trades reported to price reporting agencies per FERC 552 data.|
Platts Iron Ore
|S&P Global Platts publishes a suite of daily and monthly price assessments for iron ore, a necessary input for the production of steel.|
|Driven by China’s urbanization, global steel production has almost doubled since the start of the 21st century, leading to a surge in demand for iron ore. Prior to the year 2008, the market was opaque, with major producers and steelmakers negotiating annual pricing contracts. In 2009, the three largest iron ore producers began to sell ore based on independent benchmark prices. S&P Global Platts assessments play a critical role as a reference in physical contracts and as settlement instruments for Singapore Exchange’s derivatives contracts.|
Winning New Price Assessments Globally
Three Early-Stage Benchmarks at Different Stages of Development
S&P Global Platts continues to anticipate and meet market needs for independent physical market price assessments that bring clarity around price formation in energy and commodity markets. An increase in trading of futures contracts reflects the adoption of the price assessments in physical commodity markets around the world.
|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 liquefied natural gas, or 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, now 10 years old, is the settlement basis of the fastest growing gas derivatives contracts globally.|
Platts Black Sea Wheat
|The Black Sea grains complex encompasses wheat and corn production and exports from countries bordering the Black Sea.|
|CME Group launched Black Sea wheat and corn futures based on S&P Global Platts price benchmarks in December 2017 and followed these with the launch of options in July 2018. These contracts are cash-settled against the Platts price benchmark for Russian wheat and Ukrainian corn. Historically, agriculture derivative contracts have been physically settled. The new cash-settled contracts have gained strong traction in the market.|
Platts FOB Marine Fuel 0.5%
|ICE and CME launched futures contracts settling against the recently launched Platts FOB Marine Fuel 0.5% assessments. Trading has begun on both contracts.|
|Bunker fuel is used in the shipping Industry. To reduce harmful emissions, the International Maritime Organization announced that new sulfur limits in marine fuels would be enforced from January 1, 2020. The “IMO 2020” regulation stipulates a 0.5% sulfur emissions cap, which reflects a reduction from the current levels of 3.5%. S&P Global Platts launched a new suite of Platts FOB Marine Fuel 0.5% price assessments on January 2, 2019, for low-sulfur marine fuel to help shippers and refiners prepare ahead of the IMO 2020 implementation. Active bids, offers, and trades have taken place with derivative contracts launched by the major exchanges including ICE and CME. |
This suite of price assessments was introduced on January 2, 2019