S&p Global Inc. · NYSE:SPGI
S&p Global — S&P Global Commodity Insights — MOC Methodology Lagos Forum 2023
29 slides from S&p Global's conference presentation, Aug 31, 2023
Slide 1: Platts Price Assessments
Platts Price Assessments Virginie Malicier Senior Oil Leader, Strategic Engagement and Intelligence Group August 31, 2023 S&P Global Commodity Insights
Slide 2: Platts Price Assessments - Agenda
Platts Price Assessments - Agenda • Introduction to S&P Global Commodity Insights and our Platts price assessments • Robust assessments – key principles and characteristics • Platts window and the Market On Close assessment process
Slide 3: S&P Global Commodity Insights
S&P Global Commodity Insights We are the leading independent provider of information and benchmark prices for the commodities and energy markets. Customers in over 190 countries look to our expertise in news, pricing and analytics to deliver greater transparency and efficiency to markets. With over
Slide 4: Our part in a wider business
Our part in a wider business Our divisions include: S&P Global Commodity Insights is a division of S&P Global (NYSE: SPGI), the world’s foremost provider of ratings, benchmarks and analytics in the global capital and commodity markets. https://www.spglobal.com/commodityinsights/en S&P Global Merges
Slide 5: Our customer base spans the globe
Our customer base spans the globe We serve every link in Platts serves more than the global energy and 12,000 8 of the top 10 Fortune 500 companies and commodities supply nine of top 10 FT 500 chain and support a host of functions in a company’s workflow. of the world’s largest energy companies such
Slide 6: Our prices underpin financial contracts
Our prices underpin financial contracts >70 % >250 More than 70% oil derivatives More than 250 S&P Global Platts price More commodity contracts across global exchanges contracts use Platts assessments are benchmarks that are settled against S&P Global Platts prices than underpin some any other PRA.
Slide 7: Our assessments fulfil diverse business needs
Our assessments fulfil diverse business needs Platts price assessments are the basis for billions of dollars of transactions annually in the physical and futures markets: Buyer, sellers and traders Analysts use them to Commodity exchanges, use them as a basis for identify trends and clearing houses
Slide 8: Platts benchmarks
Platts benchmarks Platts Dated Brent NORTH Platts IODEX / TSI 62% SEA US MW Aluminum Platts T2 Ethanol UNITED Platts Urals Crude UNITED KINGDOM STATES TURKEY CHINA JAPAN Platts JKM™ Platts US Natural Gas DUBAI Platts Paraxylene/Benzene Platts Dubai Mexico City 8
Slide 9: Platts benchmarks
Platts benchmarks Platts Dated Brent NORTH Price of physical, light SEA Platts IODEX / TSI 62% North Sea crude. Platts T2 ethanol Primary physical market pricing reference for US MW Aluminum FOB Rdam seaborne iron ore fines P1020 transaction delivered into China, the premium is the basis Platts Ural
Slide 10: Platts price assessments: Data, in real time and end-of-day publications
Platts price assessments: Data, in real time and end-of-day publications
Slide 11: Why price assessments are needed
Why price assessments are needed • Benchmarks are used as reference points in commodity trading and to derive related commodity prices. • Unlike equities and future contracts, physical commodities are not homogenous, i.e.: • Platts establishes standards that give market participants a common underst
Slide 12: Robust assessments
Robust assessments Platts’ S&P Global
Slide 13: What is a robust price assessment?
What is a robust price assessment? • Consistently reflects market value • Transparent and robust methodology • Open to market scrutiny and feedback • Broad industry participation • Powered by rich, granular and verifiable price data • Auditable price assessment process • Independent, impartial 13
Slide 14: Our benchmark price assessments
Our benchmark price assessments By standardizing and providing an assessed value for a particular commodity, Platts price assessments provide a reference point for buyers and sellers. Focus, impact and relevance OTC Futures • Platts benchmarks are used to price term contracts Derivatives • Futures s
Slide 15: Quality of information is critical
Quality of information is critical The quality of the information we acquire varies widely, and Platts has an interest to use only Uniqueness good quality data for assessment purposes Quality trades, bids and offers have the following characteristics: Completeness Integrity Transparent Verifiable Cr
Slide 16: Our Price Methodologies
Our Price Methodologies Platts uses well-defined, open, and transparent Offers methodologies to deliver precise assessments of true market value • Transparency & consistency Tradeable level • Repeatability & incrementability • Price verification • Robust and consistent methodology Bids 16
Slide 17: Collecting data: A hierarchy of information
Collecting data: A hierarchy of information Firm, • Published live through Platts’ systems transparent & detailed • These take precedence over other information as value at a bids/offers. given time can be determined. Must have volume, location, spec., timing, price to have priority • Communicated v
Slide 18: Among the most transparent markets in the world
Platts Market on Close Defined Among the most transparent markets in the world • A structured price assessment process designed to yield a price assessment reflective of market values at the close of the typical trading day • Similar information gathering systems are common in the futures markets wh
Slide 19: Assessment approach: manual MOC/eWindow MOC
Assessment approach: manual MOC/eWindow MOC • Platts market reporters contact • Data is published in real-time all day • At market close, Platts reporters use buyers and sellers by phone, IM or until the “window”, a 30-45 minute data and judgment to produce a time- Platts eWindow, our online period
Slide 20: How data is collected
How data is collected Transparent process Transparent End of day assessment Values are based on named bids/offers windows/e-window Market on Close (MOC) principles Real-time technology for Assessments reflect Assessments based open price competition tradable value (or on firm bids/offers the traded
Slide 21: Platts eWindow and manual MOC environments
Platts eWindow and manual MOC environments 21
Slide 22: How data is collected: the Platts eWindow
How data is collected: the Platts eWindow Physical basis Offers Product Bids 22
Slide 23: Market On Close participation principles & guidelines
Market On Close participation principles & guidelines Transactions Open to between All bids/offers Sufficient any credible affiliates are must be time to react and credit not used available to to the bids worthy in the the market and offers market assessment participant process 23
Slide 24: Platts Market on Close participants
Platts Market on Close participants A H Meyer & CIE AG Chinaoil (Singapore) Int'l Pte Ltd GS Caltex Singapore Pte Ltd Mabanaft GmbH & Co KG Petro China International Company Ltd SOCAR Trading UK Limited A/S Global Risk Management Ltd CHS Inc GS Global Corp. Mabanaft International GmbH & Co. KG Petro
Slide 25: Objectives and Principles: MOC Participation Review Process
Objectives and Principles: MOC Participation Review Process Maintain integrity of price assessment process Prevent Promote distortion credibility of in published Market On Close prices processes 25
Slide 26: Objectives and Principles: MOC Participation Review Process
Objectives and Principles: MOC Participation Review Process There are four criteria applied to all MOC applicants and Ability to • Must be able to trade on typical terms with participants without exception: Trade a critical mass* of active MOC Participants Trade • Must demonstrate performance as a b
Slide 27: Platts methodology: produce final assessment
Platts methodology: produce final assessment US crude/ Europe crude/ Middle East Asia crude/ products products crude/ products products New York Singapore 14:30 London 16:30 16:30 Dubai 12:30 Houston 13:30 27
Slide 28: Just to recap
Just to recap Increases Encourages confidence in price responsible behaviour benchmarks The purpose of a transparent methodology Simplifies Establishes participation in high quality information the price for decision-making assessment process
Slide 29: Producing the final assessment
Producing the final assessment Platts Price Assessment Methodology is built on two fundamental principles: PRICE TIME TRANSPARENCY
S&P Global Commodity Insights — MOC Methodology Lagos Forum 2023 on 6ix