Platts Launches Alternative Fuel Tanker Freight Benchmark Ship’s crew

Platts, a leading provider of information and benchmark pricing for the commodity and energy markets, has announced the launch of new tanker tariff price assessments that include alternative fuel prices for the first time.

Platts Base Rates takes into account conventional bunker fuel and liquefied natural gas (LNG) bunker fuel and provides a standardized estimate of the costs associated with moving a tanker along a given route.

The launch represents the first comprehensive package of base rates that includes alternative fuel pricing and complements Platts’ existing offering of voyage and time-charter tanker freight ratings.

Platts Base Rates allows tanker freight rates to be calculated based on “points” and dollars per ton. They can also be used in various product netback and net forward valuations, as well as crude oil returns and netback prices.

Platts is part of S&P Global Commodity Insights.

“This launch is historic for Platts and the industry as it marks the first time a new and unique tanker scale is introduced in decades,” said Peter Norfolk, editorial director of Global Shipping & Freight at S&P Global Commodity Insights. “In addition, we offer market participants Platts Base Rates, which are calculated based on alternative bunker fuels. With annual and dynamic options, Platts Base Rates aim to help the shipping industry navigate the energy transition with increased pricing transparency.”

As sustainability and the energy transition become increasingly important around the world, S&P Global Commodity Insights expects a significant increase in the use of alternative fuels such as LNG in the maritime sector in the coming years. Platt’s Base Rates will help provide supply chain insight and pricing information related to future fuel compositions.

Platts Base Rates are designed to be future-proof for pricing tanker cargo and can easily replicate standard rates based on alternative bunker fuels such as LNG, methanol and ammonia. In addition to dynamic base prices, Platts will also publish annual base prices, updated daily using bunker price assessments from Singapore and Rotterdam.

The calculation of the base rate is based on a single established assumption: listing all possible costs for the entire voyage and dividing by the standard ship’s deadweight tonnage. This calculation results in the $/MT Base Rate, which corresponds to 100 points on the scale. Given evolving market dynamics and the growing preference for larger vessels in the tanker sector, Platts base prices are calculated based on a larger tanker size of 105,000 deadweight tonnage (dwt).

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