Platts Introduces World's First Daily Alumina Price Assessments
Provides Valuation Reference Based On Commodity's Own Physical Fundamentals
LONDON, Aug. 16 /PRNewswire/ -- Platts, one of the world's foremost providers of energy and metals information, today announced that it has expanded its suite of daily spot price assessments to include alumina, a mineral produced from bauxite ore and used to make aluminum. The new price assessments, the world's first daily price references for alumina, address the needs of miners, smelters, refiners, and traders for an independent source of open-market spot prices to better determine valuations for short- and long-term contracts.
"A daily assessment of alumina, reflecting its value at given locations particularly in the Asia-Pacific region, will enable the whole aluminum complex to re-connect with the supply and demand fundamentals of its underlying asset," said Karen McBeth, global editorial director of the Platts Metals Group. "In recent years, alumina has been priced annually as a differential to aluminum, which means that the industry has not had a realistic gauge of pre-smelter value."
Australia is the world's largest producer of alumina and China, which is also a producer, is the world's largest consumer of alumina. Platts' suite of alumina assessments capture price dynamics relating to these two geographies.
The new assessments reflect the open-market physical spot value for metallurgical grade sandy, calcined alumina, also known as smelter grade alumina or SGA.
Platts' new suite of assessments, named "PAX" for "Platts Alumina Index," includes four new daily spot price assessments:
Assessments are based on all-day market monitoring and data collection of transactions, bids, offers and other information from market participants and reflect values at the close of the Asian/Australian trading day at 17:30 (5:30 p.m.) Singapore time. All prices are quoted as U.S. dollars per metric ton (mt).
Alumina, like iron ore, is one of several commodity markets currently in transition and moving away from long-term contract pricing to short-term spot market-based pricing. To help facilitate the transition of iron ore from annual contract pricing to short-term pricing, Platts, on June 2, 2008, became the first independent publisher to provide daily price assessments for iron ore reflective of the transactable value in the spot open market.
"Our experience in iron ore has demonstrated that short-term price information can improve the transparency of a market in transition, and therefore, we believe, also its efficiency," said Francis Browne, director of market reporting for the Platts Metals Group.
Platts' alumina and alumina freight assessments are published in the real-time service Platts' Metals Alert, and publications Metals Daily supplement and Metals Week, with monthly averages available as well in the Platts' Metals Week monthly supplement.
In conjunction with the launch of the new daily alumina assessments, Platts changed the frequency of its C&F China assessment from weekly to daily and changed its name to "CFR China." This assessment, originally launched in 2004 for alumina delivered into China including cost and freight (C&F or CFR), will now be available daily, quoted in yuan and U.S. dollars.
The methodology for Platts' alumina price assessments was developed in consultation with a cross section of key industry players, draws on Platts' century of experience in benchmark price reporting in energy, and is underpinned by robust quality guidelines. Platts' metals markets reporting spans nearly 40 years, following the tradition of its parent company, The McGraw-Hill Companies, which has covered the metals markets for 80 years.
About Platts: Platts, a division of The McGraw-Hill Companies (NYSE: MHP), is a leading global provider of energy and commodities information. With a century of business experience, Platts serves customers across more than 150 countries. An independent provider, Platts serves the oil, natural gas, electricity, emissions, nuclear power, coal, petrochemical, shipping, and metals markets from 17 offices worldwide. Platts' real-time news, pricing, analytical services and conferences help markets operate with transparency and efficiency. Traders, risk managers, analysts, and industry leaders depend upon Platts to help them make better trading and investment decisions. Additional information is available at http://www.platts.com.
About The McGraw-Hill Companies: Founded in 1888, The McGraw-Hill Companies (NYSE: MHP) is a global information and education company providing knowledge, insights and analysis in the financial, education and business information sectors through leading brands including Standard & Poor's, McGraw-Hill Education, Platts, and J.D. Power and Associates. The Corporation has more than 280 offices in 40 countries. Sales in 2009 were $5.95 billion. Additional information is available at http://www.mcgraw-hill.com/.