Aug 06, 2021
S&P Global Platts will launch eight global low-carbon metals spreads and ratios as part of its expanding suite of carbon-accounted price offerings
S&P Global Platts will launch eight global low-carbon metals spreads and ratios as part of its expanding suite of carbon-accounted price offerings, effective Aug.13, 2021.
These calculated spreads and ratios will provide price comparisons for usage of lower-carbon feedstocks versus traditional or higher-carbon feedstocks as the metals industry seeks to reduce carbon emissions during production.
Underpinned by existing Platts aluminum, steel and raw materials assessments, the spreads and ratios can help quantify costs in meeting carbon emissions reduction targets and show how these costs may impact finished material prices.
As part of the global Energy Transition, the steel industry has seen greater adoption of Electric Arc Furnace (EAF), Direct Reduced Iron (DRI) and hydrogen-based steelmaking. Blast furnace steel production, mostly utilizing iron ore, generates 2.2 total metric tons of CO2 per mt of steel, while EAF steel production via scrap generates 0.3 mt of CO2, on a Scope 1, 2 basis, according to the International Energy Agency (IEA).
Aluminum producers and semi-fabricators also have sought to reduce carbon emissions related to smelting – mostly via hydropower – as well as through increased use of scrap materials versus other feedstocks. Using recycled aluminum requires 95% less energy than production via traditional raw materials, and recycling one metric ton of aluminum reduces carbon emissions by 9 mt and saves 4 mt of bauxite, according to the Aluminum Packaging Recycling Organization (Alupro).
These new Platts spreads and ratios will be published based on the frequency of their underlying assessments and be complemented by analysis highlighting insights the spreads and ratios have shown. Monthly averages also will be published.
They will be available in Market Data categories MM, SQ, SR and SS. Steel-related ones will appear in Platts Steel Markets Daily and Platts Steel Price Report. Aluminum-related ones will appear in Platts Metals Daily and Platts Metals Week. They will also appear on Platts Metals Alert pages PMA 0131, PMA 0300, PMA 0413, PMA 1318, PMA 1205, PMA 1326, PMA 1323 and PMA 1114, as well as the Platts Energy Transition Related Markets page:
MDC Symbol Freq Description
MM ALUMB00 BW US Aluminum MWT-A380 Spread
MM ALUMC00 BW US Aluminum MWT-Mill MLCCs Spread
MM ALUMA04 WA US Aluminum MWT-UBCs Spread
SQ AHRSA00 DW China HRS101 Scrap Iron Ore Ratio
SR ABLSE04 WA Black Sea Pig Iron : Turkey HMS 80:20 Ratio
SS ABUSH00 DW US HRC-MW #1 Busheling Spread
SS APGIR04 WA US Pig Iron New Orleans : MW Busheling Ratio
SS AOPIE00 DW US HRC/MW Shredded Spread
Platts is launching these new low-carbon spreads and ratios following extended engagement with market participants throughout the aluminum and steel value chains. They complement the April launch of the Platts Low-Carbon Aluminum Price (LCAP) and Zero-Carbon Aluminum Price (ZCAP) for European Good Western-origin aluminum ingot (https://www.spglobal.com/platts/en/our-methodology/subscriber-notes/030421-sampp-global-platts-to-launch-new-low-carbon-zero-carbon-aluminum-prices).
These new offerings align with S&P Global’s strategic focus on offering carbon-accounted commodities pricing and financial products, and are in response to requests from market participants for tools to help quantify cost, manage risks and spot opportunities associated with a growing focus on carbon-reduction strategies and increasing global regulation.
Platts continues to research potential additional carbon-accounted price and cost references throughout the metals and raw materials value chains. Platts welcomes feedback on its plans for expanding these pricing offerings, as well as for coverage of other market segments of particular interest.
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