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Transforming Asia’s commodity marketsEncourage competition, stimulate international trade and achieve economic growth

Bringing sustained growth to Asia’s commodity markets Supporting established and emerging marketsEnergy and commodity markets across Asia are developing fast. Rapid population growth, economic prosperity and the availability of natural resources are creating new opportunities for international trade. These markets are evolving at differing rates, but whether established or emerging, to be competitive they also need to be open and transparent.

Overcoming common challengesAsian governments and State Owned Enterprises (SOEs) face common challenges, regardless of the rate at which their markets are developing. Emerging markets are opaque, which creates uncertainty, and many governments and SOEs aren’t aware of potential risks associated with pricing commodities such as oil, gas, coal and petrochemicals and agriculture. If reference prices are used, they frequently result in supply shortages and local market unrest, because they don’t reflect current market conditions. Resulting ad-hoc price adjustments only increase uncertainty, making it harder to achieve international investment and sustained growth.

Driving successS&P Global Platts has helped governments and SOEs throughout the region overcome these challenges by adopting clearly defined standards and market-based pricing. These measures give participants a shared understanding, facilitate quick comparisons, encourage competition, increase trade, and ultimately result in economic growth.

Whether established or emerging, the Platts team is on hand to help you develop your markets. Working in partnership with your team, we’ll provide tailored support to overcome any challenges you face.

We’re here to helpClear recommendations

- We’ll examine your key business operations, identify and quantify day-to-day pricing risks, and propose clear recommendations, data and insight to support your market transformation.

Training and engagement - Our market specialists will work with key

representatives from across your organization to help them understand and communicate the value of benchmark pricing and open markets. This will facilitate the quick and seamless implementation of any new processes.

Insights with impact - We’ll provide unbiased news, analysis and data,

so you can confidently make decisions which bring transparency to your markets. We’ll address sensitive questions related to price movement through structured engagement, and will deliver regular updates on local, regional and global market conditions, including price drivers, and short and longer term trends. By combining data, market commentary, analytics, training and advisory support, we’ll empower you to transform your commodity markets.

Delivering resultsMaximizing export opportunities

- By adopting market-based pricing our customers have found that established regional and global markets are open to them. Buyers prefer this transparency and are more likely to enter into longer term trading partnerships.

Attracting foreign investment - International capital and expertise are crucial for

successful development of markets and infrastructure. Benchmark pricing mechanisms give foreign investors confidence, and unlock the necessary funds to initiate projects across the energy and commodities supply chain.

Developing cohesive markets that work for local participants

- Keeping local audiences equipped with the information they need to understand the drivers behind price movements is key to achieving cohesive markets. Governments and SOEs are just some of our many customers in over 150 countries worldwide, who benefit daily from the news, pricing, market commentary and analysis we provide.

Reducing risk exposure - If you understand your price exposure, you can more

effectively manage the risk. Armed with the right data our customers are better equipped to manage tender prices, track yield margins and ensure regulatory compliance. Data is a crucial component in understanding price exposure.

Customer case studiesNational Customs Agency, South Asia

Holding importers to accountWhen commodity prices were high, importers declared duty and paid the relevant taxes, because their margins were healthy. But as price began to fall, this national customs agency noticed that while volumes remained high, importers were evading tariffs by lowering their cargo value declarations. Meaning the Government lost out on valuable import revenue.

Ensuring importers pay the right dutyTo accurately calculate duty, this national customs agency needed access to the latest benchmark pricing information for all commodities being imported. The Platts team worked alongside the agency to demonstrate the value of benchmark pricing, and equipped them with a real-time pricing product, market data and weekly reports so they could quickly and precisely calculate appropriate taxes for each cargo.

Stabilizing crucial national revenue This national customs agency can now track the market value of all commodities being imported because they’ve adopted benchmark pricing. They can now accurately calculate duty based on current market value, and operate a fair process which has stabilized a crucial national revenue stream.

National Energy Department, Southeast Asia

Failing to reflect local marketsOperating in a deregulated market, this national energy department used WTI to price domestic fuels. However this did not reflect local oil markets. They had previously operated an oil stabilization fund, but this also failed to satisfy local retail players because it had been mismanaged and was used to finance other government projects.

Allowing local markets to flourishBy adopting a transparent pricing structure, this national energy department enabled local energy markets to flourish. The Platts team provided detailed training on our methodologies and approach, and worked closely with the department to demonstrate the value of using benchmark pricing to reflect fair market value. We identified a specific need to monitor global bio-ethanol and bio-diesel prices as a key reference for imports, and helped them to adopt an effective benchmark pricing model.

Creating a platform for sustained growthBy adopting MOPS, which is more reflective of local markets than WTI, this national energy department provided a viable platform for growth. The department worked hard to give local market participants a clear insight into the new transparent pricing model. This new model has given local participants confidence in the market. Retail station players are now able to adjust their pump prices in line with the government’s published price.

The nation’s downstream oil industry achieved growth after deregulation, and benchmark pricing helped attract significant investment from independent players. Transparency has also strengthened the country’s energy supply, with over 20 major independent players now importing around 70% of total volumes.

"They can now accurately calculate duty based on current market value"

"This new model has given local participants confidence in the market"

National Oil Company, South Asia

Failing to capitalize on volatile marketsVolatility in oil markets meant this national oil company struggled to keep pace with prices and market developments when purchasing crude and refined oil products. Without access to timely information, they didn’t understand the underlying dynamics driving domestic and international markets, and were consequently exposed to significant price risks. Their failure to optimize prices meant they were often paying above market value. Their margins were further impacted by competition from a parallel importer which the government had allowed to operate in the country.

Reducing exposure to price risksBy conducting detailed analysis of this national oil company’s trading operations, the Platts team quickly identified and quantified their risk exposure. We equipped them with a package of support which included pricing, analytics, vessel tracking and marine credit analysis and reporting.

Optimizing marginsThis national oil company can now track margins and develop more robust forward plans, because they’ve adopted benchmark pricing and have a better understanding of market fundamentals. Armed with real-time pricing and analysis, they can confidently negotiate with foreign counterparties, mitigate pricing risk for cargoes being tendered, and optimize crude and refined product imports. The market data and insights we provide have also enabled them to understand and manage risks associated with refining margins, and they’re now better able to optimize these margins.

National Airports Operator, South Asia

Failing to reduce price exposure With responsibility for purchasing jet fuel, naphtha, gasoline and gasoil to refuel planes and operate ground services, this national airport company lacked understanding of local and international markets. Their exposure to price risks was compounded because of the scale of their operation, which also includes running several power generation sites.

Reducing price vulnerabilityTo reduce price vulnerability this national airport company needed access to market data, real-time benchmark pricing information, and forward curves for all fuel and refined oil products being imported. Platts provided onsite training to help the company adopt and incorporate new working methods. We equipped them with a carefully selected data and information solution package to help them monitor price trends, and better inform their planning, hedging and risk management decisions.

Paying the right priceThis national airport operator is able to track spot markets and pay the right price for all fuel products they import, because they’ve implemented benchmark pricing. With a greater understanding of refined product markets, and access to historic data and forward curves, they can manage their price risk and optimize their purchasing strategy. They’ve already achieved significant savings and have begun to invest in storage units and other physical assets to further improve their operations.

"With a greater understanding of refined product markets, and access to historic data and forward curves, they can manage their price risk and optimize their purchasing strategy"

"This national oil company can now track margins and develop more robust forward plans"

Capitalize on emerging opportunitiesPlatts is the leading independent provider of information, benchmark prices and analytics for the energy and commodities markets. By understanding that markets can only thrive with clearly defined standards, we are able to help a wide range of governments and SOEs throughout Asia to developing open markets. We help them capitalize on emerging opportunities – opportunities to forge effective relationships with local market participants, attract foreign investment and stimulate international trade.

Our industry specialists talk to the market every day, gather data and publish our price assessments to make successfully navigating the ever-changing global energy and commodities markets easier for you.

If you’d like to find out more, then we’d be delighted to arrange a convenient meeting, to talk through our capabilities in more detail, and to show you our price discovery process in action.

Email: support@platts.com Call: +65-6530-6430 Visit: www.platts.com

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