Proposal to amend aluminium P1020A MJP spot premium methodology

Fastmarkets is proposing to amend its aluminium P1020A main Japanese ports (MJP) spot price assessment methodology, which is assessed on a cost, insurance and freight (CIF) incoterm basis, to include tenders and deals from the domestic market in Japan and to extend the delivery window.

The aim of the change is to create a more robust price assessment by increasing the pool of liquidity.

The current methodology indicates that pricing data must be under a CIF basis to the main Japanese ports and for the delivery window to be within six weeks for it to be accepted for data analysis in the price assessment process.

Market participants have indicated to Fastmarkets that domestic deals in the Japanese market follow the same trend as international CIF deals and that netbacks can be used to include them on a CIF basis.

Fastmarkets is therefore proposing to take into consideration trucking costs, exchange rates, payment terms and warehouse costs to normalize data from domestic deals and tenders to a CIF basis.

Fastmarkets particularly invites feedback from the market on the approach toward the Japanese Yen to US dollar exchange rate, with market participants having identified it as a potential source of volatility. For example, a monthly average rate could be used or the exchange rate on the day the deal was concluded.

Fastmarkets also invites feedback on an acceptable delivery window for a spot assessment in this consultation with regard to liquidity, after some market participants suggested that an extension to the delivery window could help capture more liquidity.

The consultation will run for four weeks from Tuesday February 21 and will end on Tuesday March 21. The amendment will then take place, subject to market feedback, on Friday March 24.

To provide feedback or if you would like to provide price information by becoming a data submitter to this price assessment, please contact Chay Chye Leng or Alice Mason by email at pricing@fastmarkets.com. Please add the subject heading “re: Aluminium MJP spot methodology.”

To see all Fastmarkets’ pricing methodology and specification documents, go to https://www.fastmarkets.com/about-us/methodology.

What to read next
The publication of Fastmarkets’ MB-BMS-0014 Black mass, NCM/NCA, payable indicator, cobalt, domestic, exw USA, % payable Fastmarkets’ standard-grade cobalt price assessment and MB-BMS-0015 Black mass, NCM/NCA, payable indicator, nickel, exw USA, % payable LME Nickel cash official price assessment for Wednesday November 20 was delayed due to reporter error. Fastmarkets’ pricing database has been updated.
Fastmarkets has corrected the rationale and trade log for MB-LI-0033 lithium hydroxide monohydrate LiOH.H2O 56.5% LiOH min, battery grade, spot price, cif China, Japan & Korea, which was published incorrectly on Friday November 22.
Market feedback shows that these two commodities see active spot liquidity and great price volatility. Therefore, a higher assessment frequency enables Fastmarkets to reflect their spot market dynamics in a more timely manner. The new specifications for the prices are as follows, with the amendment in italics: MB-LI-0036 Lithium carbonate 99.5% Li2CO3 min, battery grade, […]
Fastmarkets proposes to lower the frequency of its assessments for MB-AL-0389 aluminium low-carbon differential P1020A, US Midwest and MB-AL-0390 aluminium low-carbon differential value-added product US Midwest. Fastmarkets also proposes to extend the timing window of these same assessments to include any transaction data concluded within up to 18 months.
Fastmarkets wishes to clarify details around the following aspects of the pricing methodology for MB-AL-0343 aluminium P1020A (MJP) spot premium, cif Japan, $ per tonne.
Fastmarkets has corrected its MB-AL-0399 aluminium scrap, old sheet (Taint/Tabor), cut sheared, 5-8% attachments, cif India price assessment, which was published incorrectly on Wednesday November 20.