PLATTS’ practices have been thrown under the spotlight once again after Chinese steelmakers questioned the reliability of its iron ore pricing.
The China Iron & Steel Association and a number of market participants were reported by Bloomberg to be concerned about the size of deal samples used and lack of clarity over methodology.
The world’s leading price reporting agency confirmed earlier this month that it is under investigation by the European Commission relating to allegations of oil price manipulation, alongside oil giants BP, Shell and Statoil.
Platts defended its iron ore pricing yesterday, saying it was in fact more transparent than methods used by other agencies.
“The Platts process makes it possible to see who is trading and who is submitting price data to the price assessment process,” a Platts spokesperson told City A.M. via email.
“Importantly, no other price discovery process identifies data by company name. Platts has brought greater transparency to iron ore pricing as the market has moved from long-term pricing to short-term pricing.”
The spokesperson refuted criticism that too small an amount of data was used to assess pricing, adding: “Although a robust sampling is preferred, Platts believes it is not an absolute necessity. What is necessary is that the information is credible, verifiable and reflective of the market.
“Competitive, transactable bids and offers and spreads relationships and other data are also utilized in the assessment process.”
Regarding the EC probe, the Platts spokesperson said that the company has not been charged with any wrong-doing, is cooperating fully and is “continuing to conduct business as usual”.