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Petrochemicals assessment process guidelines

(Latest Update: December 2014)



PLATTS GUIDELINES FOR Styrene: platts_us_styrenics

Aromatics Europe:

INTRODUCTION Benzene & toluene: platts_euro_aromatics

Platts Petrochemicals Editorial Guidelines and Methodologies are designed PX & MX: plattsparaxylene
to complement the existing Platts Guide to Petrochemicals Methodology and
Specifications. Styrene: plattsstyrene

The Editorial Guidelines document focuses on the protocols applicable to Platts Gasoline components & biofuels:
reporting on real time Platts Petrochemical Alert (PCA) page 005. The document
was produced at the request of the industry, which asked for clear and detailed Asia MTBE: platts_asia_mtbe
guidelines from Platts on these protocols and the Market on Close (MOC)
assessment process. The document will be updated periodically to ensure that the Europe MTBE: plattsmtbe
guidelines are as comprehensive as possible.
US MTBE: platts_blendstocks_feedstocks
PCA page 005 is a page on the electronic screen service Platts Petrochemical Alert
that publishes information in real time on bids, offers, transactions and any other
information relevant for the assessment of European petrochemical products. Time of assessment
Bids and offers published on PCA page 005 are assumed to be firm and may be
used in the open and transparent assessment processes employed by Platts. The Platts assessment methodologies for European and Asian petrochemicals reflect the
information contained in PCA page 005 is stored electronically and is time-stamped. prevailing market price at 16:30 local time. For petrochemical assessments from the
Americas, assessments reflect the prevailing market price at 14:15 Central Time.

Method of submission/communication
for bids/offers and transactions
Platts accepts any reasonable method of delivery/communication for bids, offers
and transactions. Platts editors typically communicate with trading companies Buyers and sellers have the right to communicate bids or offers directly to Platts,
by phone or online instant messaging systems. Platts tries to accommodate the provided that the said company has completed the editorial review process.
communication needs of its customers and will endeavor to open any additional
communication channels required. Please contact Prema Viswanathan, Associate Platts also takes into its editorial consideration bids, offers and transactions seen
Editorial Director, Platts Asia Petrochemicals, Singapore at (65) 62161196, e-mail: during the assessment day. These inputs are analyzed and normalized to reflect a; Andrew Allan, Associate Editorial Director, market value at the respective MOC close.
Petrochemicals Europe, London at (44) 20 7176 6850, e-mail: Andrew.allan@platts.; or Bernardo Fallas Managing Editor, Petrochemicals Americas, All bids and offers are firm from the moment of submission. For Europe and Asia,
Houston at +1 713 655 2214, e-mail for further details. Platts accepts bids and offers for inclusion in its daily assessments no later than
16:00 London/Singapore time, respectively. Bids/offers which are time-stamped
The list below gives key Instant Messaging points for Platts European, Asian and at 16:00:00 precisely will not be considered in the assessment process. (for a
Americas petrochemical teams. Please note Yahoo IDs are subject to change: complete list of assessment timings please see:
Aromatics Asia: increment-guidelines.pdf)

Benzene: benzene_platts The volume, quality or loading/delivery timing cannot be changed from 16:00:00.
However, a seller or buyer may change the price of the offer or bid up to 16:28.00.
Toluene: platts_asia_toluene No changes in price can be made from 16:28:00 precisely. Firm bids and offers
automatically expire at 16:30.
PX, iso & sol MX: platts_asia_px
For the US, Platts accepts bids and offers for inclusion in its daily assessments
Styrene: platts_asia_sm no later than 13:45:00 Central time. Price changes to bids and offers will be
recognized up to 14:10:00 Central time. Firm bids and offers automatically expire at
Methanol: platts_asia_methanol 14:15:00 Central time. (for a complete list of assessment timings please see: http://
Aromatics Americas: Petrochemicals-timing-increment-guidelines.pdf)

Benzene, toluene, PX & MX: plattsaromatics Platts recognizes the time of receiving a message from a company, as opposed to
the time a message was sent by the counterparty.


Buyers or sellers can withdraw bids/offers at any time, provided no prior interest to
transact has been expressed by any potential counterparty. 1. Before 4:00 PM/1:45 PM Central

All participants that have reported bids and offers for inclusion into PCA page 005 ■ Only firm bids and offers accepted
are expected to promptly report any transactions stemming from their publicly
available bids or offers.

Platts synchronizes its computer clocks every day precisely, and will compare the 2. From 4:00 to 4:28 PM/2:10 PM Central*
time of any submitted bid/offer or communication by a market participant intending
to transact, against the computer time, in order to ensure that the cut-off points for ■ No new bids or offers
new bids and offers, price changes and the market’s close are accurate. Please note
that Platts applies the timing deadlines strictly. ■ Volume, terms & conditions cannot change

For the purposes of clock synchronization, market participants may find the ■ Only prices can change
following internet link to be helpful:
■ Market Makers, Market Watchers can hit bids/offers

Time of assessment in eWindow ■ *For US aromatics, from 1.45-2.10 PM Central time.

In physical product assessment process which utilize the eWindow tool for
European petrochemicals, Platts reflects bids and offers on barges and cargoes
which are directly submitted into eWindow prior to 16:05:01 London time. 3. From 4:28 to 4:30 PM/2:15 PM Central*

The quality or loading/delivery timing cannot be changed from 16:05:01. However, a ■ All bids & offers frozen, no further price changes will be
seller or buyer may change the price of the offer or bid up to 16:30:01. published, but interest can be withdrawn

■ Bids & offers can be hit

Repeat bids/offers
■ Deals made one-to-one
Following any trade, the original on-screen seller/buyer must revert immediately as
to whether or not he/she is prepared to offer or bid for more volume. An intention ■ *For US aromatics, from 2:10 to 2:15 PM Central time.
to rebids or reoffer must be received by Platts as soon as is possible and within a
reasonable time frame.
If this new bid or offer emerges after the cut-off point for the entry of new bids or Petrochemicals-timing-increment-guidelines.pdf)
offers (16:00 London/Singapore and 14:15 Central Time for US markets), such a bid
or offer may not be considered.
Extension period
Unless sellers/buyers expressly inform Platts of their continued interest to buy/sell
after a deal, Platts will presume the players are not there for more volume. If, following a trade, any party expresses its repeat interest to buy/sell with 20
seconds of the close at 16:29:59 in London and Singapore and 14:14:59 CT in
The rebid or reoffer must match the initial position’s parameters, with the exception US, a three minute extension period will be triggered in order to adequately test
of price. A rebid or reoffer can be made at the same level or less competitive to the repeatability. Only the bid or offer that showed repeat buying/selling interest will
traded price. For example: Company B hits Company A’s bid for $500/mt during the be valid during the extension period.
MOC. Company A can rebid at $500/mt or below this level.
A notice for extension of the window will be sent on PCA page 005 as soon as
When there are multiple bids or offers at the same level, the first person to reach possible after this interest is posted.
the market maker bid/offer level is the first person to be filled. Subsequent deals
will go to the second, third and fourth market maker. This means that as each The principal must stand firm on that re-bid/re-offer up to the three
market maker at a level gets filled, repeat bids and offers will move to the back of minutes, until 16:33:00 (London/Singapore) and 14:18:00 CT (US), in order to
the bid/offer order. adequately test repeatability. The market maker can alternatively withdraw
at any time during this extension provided that no one has expressed
interest in the position. Following a transaction, the market maker can
Repeat bids/offers in eWindow choose to re-bid/re-offer again during this extension period provided that
Platts is notified of the rebid or reoffer promptly. (for a complete list of
In those European, US and Asian editorial processes where eWindow is used, assessment timings please see:
Platts will accept a repeat bid/offer indication no later than 30 seconds after the MethodologyReferences/MethodologySpecs/Petrochemicals-timing-increment-
indication of a trade. (for a complete list of assessment timings please see: http:// guidelines.pdf)


Extension period in eWindow SUBMISSION OF BIDS AND OFFERS

If, following a trade any party expresses its repeat interest to buy/sell within Submissions of bids, offers or transactions should not be considered as received by
20 seconds of the close at 16:30:01 (London/Singapore) and 14:15:01 CT (US) Platts unless acknowledged as received by Platts. For communication initiated by
in eWindow, an automatic one minute extension will be triggered in order to phone Platts will consider the time when the trader actually communicated the bid/
adequately test repeatability. Only the bid or offer that showed repeat buying/ offer or transaction.
selling interest will be valid during that extension period. An automatic one
minute extension will also be triggered if the price on an existing bid/offer is Bids and offers submitted on time but in an incomplete form, where the terms are
improved. This automatic extension applies in those editorial processes where only clarified after the cut-off deadline, will not be used in the assessment process.
eWindow is used.
Hence as a general recommendation Platts advises market participants not to wait
If at the close there is additional market depth at the same price level as the order for the last possible minute before the cut-off deadlines for bids and offers, as the
that triggered the extension, the assessment will reflect the remaining market communication may not be completed on time.
depth at the close.
A buyer or seller can communicate with Platts directly to express buying or selling
interest. Platts may also take into consideration bids and offers made via a broker,
provided the buyer or seller have communicated to Platts that they have authorized
the broker to speak on their behalf.
Buyers or sellers may name their own terms and conditions for trade.
Platts will post these terms and conditions on PCA page 5. However, Platts
reserves the right of discretion to not reflect in its assessments any deals
that are done on non-standard trading terms and conditions. In the same
way, any terms and conditions reported on PCA page 5 that do not reflect For bids/offers and transactions communicated online, traders should not
standard market trading practices outside the trading window may not be assume that Platts has received the communication unless acknowledged by
reflected in the Platts assessments. If an onscreen bid is filled by a seller, Platts. Acknowledgment may take the form of “yes,” “OK,” “y,” “k,” or any other
Platts will not recognize subsequent buying interest at the traded price by reasonable form.
an off-screen player as a test of repeatability, as this would be treated as a
fresh (and therefore late) bid.
Platts will report the details of new off-screen buying interest on PCA page
5 after the close of the window (or after the close of an extended window). The assessment process reflects bids/offers and trades made in a transparent
However, any deal done at that price would not be reflected in Platts’ environment. The bids/offers and trades are subjected to validation and verification
assessment. by Platts editors. The bids and offers made on a firm basis are executable by
any credit worthy counterparty with a good performance record. Any transaction
In case of technological difficulties or any communication problems stemming from a bid or offer made in the Platts assessment window processes
encountered on PCA page 5 where market participants are unable to should be interpreted as an acceptance of Platts’ editorial protocols.
see the bids and offers, buying or selling interest may be considered
by Platts to be non-public and non-executable, and therefore not used Platts will monitor instances when it appears that a buyer or seller fails to answer
for Platts’ assessment. Platts will monitor all the activity and price to a potential counter party wishing to do business. This monitoring is intended
formation that occurs with the transparency provided by firm bids/offers to ensure that the failure is not intentional and designed to prevent performance.
or deals done. The assessment process is very rigorous and tracks the time of submission of
bids, offers and transactions. The assessment process tracks all circumstances
Platts may not take deals into consideration if negotiations for such deals surrounding the trade and any issues regarding performance.
have not been properly monitored to ensure the transacted value reflects a
transaction done on an arm’s length basis. Deals done at a level different Platts not only focuses on the performance of the transaction but also on issues
from those publicly available to all market players may not be taken into stemming from it, including logistics and eventual delivery of the product. This
consideration. Trades between affiliates, subsidiaries or related parties will post-deal tracking enables Platts to determine the actual performance of the
not be recognized for assessment purposes. Bids and offers are understood to participants in the trade and the validity of their inputs. Platts therefore may
be available to the market at large and not to the affiliates and subsidiaries request documentary material to determine performance and validity.
of the company bidding/offering. If a bid or offer is taken out by an affiliate,
subsidiary or other related party, this may result in loss of credibility by the
parties with Platts, which may subsequently remove the parties’ right to
submit bids and offers.
Platts is an information company and in general it aims to publish any credible
Platts will not publish or reflect an intention to fill a bid or offer which stipulates bid or offer reported to it. Platts makes no commitment to publish every bid or
a change in terms as a requirement to trade. A bid or offer that is filled on offer submitted to it, however. For instance, frivolous bids and offers may not be
this basis will be regarded as a fresh indication that could not be fully tested retransmitted. Information reported by market participants that may have legal
transparently by the market. implications, for instance potential slander, will not be reported.


Terms of trade such as quality, delivery port, timing of delivery/loading and price The minimum amount of time between incremental price changes is one minute
are fully up to the company issuing the bid or offer. Bids and offers which are following the cut-off deadline for initial bids and offers. Any request to move the
deemed as atypical relative to the market will not be fully taken into consideration price of a bid or offer sooner than one minute from the previous move will be
for the assessment process. Such bids/offers or transactions would be at best disregarded by Platts. Market makers must communicate each tick in the price of
indicators of an overall market condition but they would not be seen as exact their position explicitly to Platts. Platts editors do not commit to raising bids or
indicators of market price. lowering offers in an automatic manner.

Any unusual condition or request regarding the cargo should be specified at the Market makers are allowed to back up positions by a reasonable amount (i.e. lower
moment the initial bid or offer is made. Any unusual request that surfaces at bids or raise offers) during the assessment process. The incrementability standard
the time a counter party is ready to trade and that impedes the normal flow of a does not apply when a bid is lowered or an offer is raised, but the market maker
transaction could be seen as an impediment to trade. must always improve their price position incrementally. GAPPING

Information reported by market participants that may have legal implications,

including but not limited to potential libel, will not be published.

Market participants are encouraged to inform Platts when they cannot trade with Bids and offers that are initially made at too high or too low levels may be
another typical market participant due to performance, credit or legal issues before considered as market gapping through unproven levels of price support or
the cut off deadlines for initial bids and offers. Platts may ask market participants to resistance. Platts reserves the right to not publish such bids and offers during the
provide supportive documentation to ensure the integrity of its assessment process. MOC assessment process.

When transactions are concluded at levels that have not been fully tested by the
market because price changes have been non-incremental, Platts may determine
that actual market value is somewhere between the last incremental bid/offer and
Published bids and offers have an automatic expiration of 16:30:00 London/Singapore the transaction at the gapped level.
time or 14:15:00 CT in the US. Market participants may extend the validity of their
bids and offers by communicating a preference to Platts to add a specific time span. In Market gapping or attempts to gap will be subjected to editorial scrutiny with
those cases where buyers or sellers express their intention to keep on buying or selling a view to determine if the action was normal market practice or frivolous, with
right before the expiration of the validity of the bids and offers, a time extension of 3:00 intent to misrepresent tradable value. Platts will examine the underlying market
minutes may be added to enable proper communication with potential counter parties. fundamentals and related price indicators to evaluate apparent instance of
This would extend the validity of the bids and offers up to 16:33:00 London/Singapore market gapping. (for a complete list of assessment timings please see: http://
time or 14:18:00 CT in the US. (for a complete list of assessment timings please see: Petrochemicals-timing-increment-guidelines.pdf)

Note for Asian Petrochemicals Window

Expiration of bids and offers in eWindow
Platts Petchem physical (Asia): Platts reserves the right not to publish any bids or
In the assessment process which utilize the eWindow tool bids and offers have an offers considered to be unreasonable, such as a low bid or a high offer that does not
automatic expiration of 16:30:01 London/Singapore time and 14:15:01 CT in the US represent market value. Platts reflects incremental changes in bid/offer levels that
unless a repeat bid or offer or price change is submitted in the last 20 seconds prior give a counterparty ample time to execute. In practice, initial bids below or offers in
to the respective closes. excess of $10/mt of notional values published before MOC or improvements in bid/
offer levels in excess of $1/mt per minute during MOC may be seen as excessive.
In the event that a repeat bid or offer or a change to a bid/offer price is submitted in Platts may vary these parameters without notice, depending on market conditions.
the last 20 seconds prior to the MOC close, a time extension of up to 1:00 minute may Buyers and sellers can retreat on a non-incremental basis but any subsequent
be added to enable proper communication with potential counterparties. This would improvements in bids/offers must be made incrementally from the level to which
extend validity of the bids and offers in the eWindow environment up to 16:31:01 the buyer or seller retreated. If a buyer or seller retreats to a level considered
in London/Singapore and 14:16:01 CT in the US. (for a complete list of assessment unreasonable, such a bid or offer will be excluded from the assessment process.
timings please see:

Incrementability In those markets where bids and offers are submitted directly via eWindow,
the minimum amount of time between incremental price changes is 30 seconds
Submitted bids and offers may be changed by market participants in small following the cut-off for initial bids and offers. As eWindow is adopted, efficiency
increments in line with ongoing market practice in order to avoiding “gapping improvements allow incremental price changes to be made more quickly. (for a
the market.” Trading conditions such as market volatility help determine normal complete list of assessment timings please see:
increments. Changes exceeding those parameters will not be published and may Content/MethodologyReferences/MethodologySpecs/Petrochemicals-timing-
result in the bids and offers being ignored in the assessment process. increment-guidelines.pdf)



Single transactions may be a reflection of market value. However, single Platts considers all explicit communication received during the MOC assessment
transactions need to be measured against the broad span of similar transactions. process. Implicit or unclear communication received from market participants will
not be considered in the assessment process.
If, for instance, a buyer decides to lift an offer but is unwilling to buy more
material offered at the same level, it would be determined that the buyer failed the A bid/offer will be considered firm within the Platts assessment processes
repeatability test. This transaction may be considered as not fully representative regardless of any external discussions taking place or having taken place between
and Platts would use the remaining offers as the basis for the assessment process. market maker and a market taker. The firm bid/offer will only be considered as
An inverse case would apply when the seller is only willing to sell into a low bid no longer available if the market maker expresses its withdrawal, or execution of
and unwilling to repeat its transaction. a transaction, to Platts editors before another principal expresses its intention to
If a seller wishes to continue selling additional material at the level transacted,
he should declare his intention promptly. If a seller fails to declare promptly his In those instances when a counterparty directly or via representative contacts
intention to keep on selling, Platts editors may determine that the seller has no a market maker without informing Platts editors handling the MOC process, the
more material to sell. Any subsequent offer may then be considered within the market maker should report this transaction to Platts. Confirmation from the
stated times for entry. If the seller notifies his intention to re-offer after the cut-off market taker in this scenario is also required either direct or via a representative/
period for new bids and offers, the offer would be considered too late to be used in intermediary of the counterparty, provided the market taker has communicated to
the assessment process. The same scenarios apply to a buyer who wishes to keep Platts that the representative can execute on its behalf prior to the transaction.
on buying.
If confirmation cannot be obtained from both parties for deals transacted during
the Platts MOC assessment process, Platts reserves the right not to use such
information for the assessment.

In the event that more than one counterparty expresses his/her intention If a market maker takes out another position during the assessment process,
to execute a transaction based on an existing bid or offer, the logical they must communicate to Platts if they wish to withdraw their existing position
counterparty should be the first party that demonstrated its intention to following the trade. Otherwise, it is assumed the market maker’s own position
trade. Platts will monitor time stamps or any other available time mechanism remains active.
in the event of a dispute with the aim of determining who the first potential
buyer of record was.
In the event of a market maker rebidding or reoffering during the Platts MOC
assessment process, the queue of market takers expressing interest in that position In the event of a failure of telephone or computer networks editorial deadlines may
will reform once the rebid or reoffer is published on PGA pages 5, 3, and 468. Platts be changed. This event is extremely infrequent but ‘windows’ may be extended by a
will not consider any interest expressed in a rebid or reoffer before the position is few minutes to enable proper communication. Entry of a bid or an offer that has not
published to be executable during the MOC assessment process. been retransmitted to the market at large may not be considered in the assessment
process, as it would only be known to an editor and not to a potential counterparty
in the market place.

Platts relies on an internal clock to determine the sequence of events
within Platts’ assessment process. In markets where Platts’ eWindow is
in operation, the eWindow clock will be used to determine the correct Platts routinely, and as part of standard editorial practice, reviews the companies
sequence of events when a bid or offer is amended, withdrawn, or traded participating in its price assessment processes. These reviews ensure the suitability
by an interested counterparty. Bids or offers submitted by phone, or any of data and information that are used to formulate Platts’ end-of-day price
other medium such as instant messaging software, shall be clocked at the assessments. These reviews are conducted on a regular basis, and may take into
time the bid, offer or trade indication is actually transmitted through the consideration an array of issues including, but not limited to, adherence to editorial
Platts eWindow system. As per Platts methodology, buyers or sellers can guidelines, operational and logistical issues, as well as counterparty acceptance.
withdraw bids/offers at any time, provided no prior interest to transact has
been expressed by any potential counterparty. All bids and offers are firm The reviews are not designed to impede a company’s ability to bilaterally engage in
from the moment submitted into Platts eWindow to the moment they are market transactions; the objective at all times is to ensure the integrity of published
traded, the window period closes or the bid/offer is withdrawn from the price assessments. Platts does not disclose the nature or scope of routine reviews
system by the trader or a Platts editor. of data providers who participate in its price assessment activities.