S&P Global Platts looks to revise methodology for Chicago Argo ethanol prices assessments

February 21, 2019 |

In Illinois, following a period of industry consultation, S&P Global Platts announced a proposal to revise the methodology for its Ethanol Chicago (terminal) price assessment to expand the delivery (offtake) options to include barge, rail and truck loading, effective May 1, 2019.

“By this proposal, we will expand delivery options for our Ethanol Chicago price assessment, reflective of the extensive feedback we received from market participants through our hosted events, in-person discussions and other dialogues. Ensuring the benchmark continues to evolve with the marketplace and providing the optionality that market participants need for logistics flexibility are key components of our active stewardship of the price assessment processes we conduct. An added benefit of the methodology changes will be the potential for enhanced market activity underpinning the price assessment,” said Ian Dudden, Global Content Director, Metals & Agriculture, S&P Global Platts.

The basis of the S&P Global Platts Ethanol Chicago Argo Ethanol price assessment would remain Intertank Transfer (ITT) at the Kinder Morgan (KM) Argo fungible system. Under the proposed change, the option to take delivery of product other than by ITT in the KM fungible system will be at the buyer’s option, and all incremental costs associated with the chosen offtake option would be borne by the buyer. A seller should not unreasonably withhold any offtake option and any associated costs for non-ITT offtake options must be demonstrably reasonable and typical.

S&P Global Platts is also proposing to revise the standards of incrementablity for its Ethanol Chicago (terminal) assessment during the Market-on-Close (MOC) price assessment process, to better reflect current trading and pricing granularity. Platts is proposing that effective May 1, bids and offers may be improved by a maximum of 10 points per 15 seconds, from the current 25 points per 30 seconds.

Print Friendly, PDF & Email

Tags: , ,

Category: Producer News

Thank you for visting the Digest.