46-47Core 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 that 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.
Platts Dated Brent
Platts Dated Brent is the world’s leading benchmark assessment of the value of physical, light North Sea crude oil.
- The term “Dated Brent” refers to physical cargoes of crude oil in the North Sea that have been assigned specific delivery dates. Analysis of trading activity in the physical spot markets by market reporters at S&P Global Platts culminates in the publication of the Platts Dated Brent benchmark — our daily assessment of the price of Dated Brent in the North Sea crude marketplace. Dated Brent is used as a benchmark pricing reference for transactions involving crude, refined products, and other commodities. It is also seen as a bellwether for the health of the overall oil market and, furthermore, the global economy.
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, more than a decade old, is the settlement basis of the fastest growing gas derivatives contracts globally.
Platts Iron Ore
S&P Global 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.
- 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.
Introducing New Price Assessments Globally
Three Early-Stage Benchmarks
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.
In December of 2019, S&P Global Platts became the first Price Reporting Agency to launch assessments of hydrogen, which is rapidly emerging as the key fuel in energy transition and global decarbonization. S&P Global Platts’ growing suite of hydrogen assessments currently covers key points in the U.S., Canada, Northern Europe, and Japan.
- Hydrogen’s ability to function as an energy store is an important solution for issues around intermittency that have limited the flexibility and utilization of renewable sources of power such as solar and wind.
- Hydrogen’s huge potential lies in its natural abundance and the fact that it releases no harmful pollutants as it is consumed. Hydrogen can, depending on the production technique employed, also be produced without releasing any harmful pollution.
- Many countries and companies around the world have invested significantly in developing hydrogen projects and roadmaps, with the fuel projected to play a significant role in clean power production, metals manufacture, atransportation, chemicals processing and, critically, energy storage.
In September 2019, S&P Global Platts acquired Live Rice Index (LRI), a global provider of information and benchmark price assessments for the rice industry, as part of S&P Global Platts’ multi-year strategic investment in agriculture markets.
- Founded in 2011, LRI has established itself as the leading price reporting agency in the global rice industry. LRI offers rice price assessments, news, and analysis for rice market participants in countries including Argentina, Brazil, Egypt, India, Pakistan, Paraguay, Thailand, Uruguay, U.S., and Vietnam.
- Rice is the most important grain for human consumption worldwide, directly feeding more people than any other crop, and is forecast to grow strongly over the next 30 years, underpinned by robust production and consumption fundamentals.
S&P Global Platts publishes hundreds of daily freight rate assessments covering all major shipping markets including tankers, dry bulk, containers, and LNG. These assessments are used for physical benchmarking, and several assessments are listed by exchanges as the basis of derivatives contracts.
- The lifting of the ban on U.S. crude exports at the end of 2015 prompted a revolution in tanker market trade. This prompted S&P Global Platts to launch several new freight rate assessments to reflect the change in trade flows. The 70,000 ton assessment for an Aframax vessel carrying crude oil from the U.S. Gulf to Northwest Europe (known as U.K. Continent) was launched by S&P Global Platts in May 2018 and listed by ICE as a derivative contract the following September, with the first trading volumes recorded in early 2019.
- Freight’s role as an intrinsic part of commodity trade makes it particularly exposed to high levels of volatility. S&P Global Platts’ freight assessments and the associated derivatives contracts help participants manage their risk and successfully navigate the peaks and troughs of freight markets.