18 Dec W2E/AEI© – RDF & SRF
Posted at 18:02h in Issue 45
|W2E/AEI© RDF & SRF|
|Indices||CV (NAR)||Delivery||Fee – € (Euros)|
|W2E-RDF1||10 – 12 Mj/Kg||DAP ARA||-135.45|
|W2E-RDF2||12 – 14 Mj/Kg||DAP ARA||-107.50|
|W2E-SRF1||16 – 18 Mj/Kg||DAP ARA||-82.32|
|W2E-SRF2||18 – 22 Mj/Kg||DAP ARA||-65.85|
- The purpose of W2E/AEI is to support an OTC market leading to a Futures market for RDF and SRF. To serve a traded OTC market W2E/AEI is based upon known bulk freight rates for vessel shipments as containerised or truck movements are too variable and inconsistent to apply to the index.
- Detailed SSP (Standard Specification Parameters) for each quality are available to the international W2E Market Bulletin subscribers.
- Quality variance from the SSP is reflected in the penalty/premium value (+/-) in the standard contract price clause (Euros).
W2E/AEI© is a benchmark index for Alternative Fuels (AF), currently RDF and SRF, representing different specifications (semi-processed, processed) in accordance with standardized regulations.
- W2E/AEI indices currently cover the visible geographic trading hubs. Expanding Global Supply v Demand requires an index to be used as a benchmark for trade in developing the expanding regions and countries.
- W2E/AEI indices can be used for valuations of assets and trading; the index creates price transparency enabling investment in infrastructure. RDF & SRF are Commodities. No different than oil, coal, gas. The index assists valuing the commodity as an asset facilitating trades by allowing exposure to AF fuel prices and enabling correlation to other similar asset classes or commodities, such as carbon fuels (liquid, solid, gas).
- Energy Markets function by measuring gas or coal carbon value against Power values and Spark Spreads. W2E/AEI indices enable spread trading and risk management for AF’s.
- Methodology used to report the index is based on reported trades for the delivery hub, global supply v demand and, freight costs. The basket of tonnage-weighted information is topped and tailed providing a robust index.
- W2E/AEI adopts similar principles to other indexes; W2E/AEI will not influence AF pricing; it reflects value and provides a standardised trading instrument (SWFTA) for AF’s (currently RDF & SRF) providing market driven opinion on the current and future direction of AF prices. Like other indices W2E/AEI has no influence over prices, compared to Futures where physical delivery is used as a settlement.