Trading EN590 diesel at cargo scale follows a standardised process that has evolved over decades in the international petroleum market. Understanding each step — and the documents required — is essential for any buyer or seller entering this market for the first time.
The Complete EN590 Trade Process — Step by Step
Step 1: Soft Probe and Market Inquiry
The buyer (or their representative) sends an informal inquiry specifying the desired product (EN590 10ppm), volume, delivery terms (FOB/CIF), price range, and preferred payment instrument. This soft probe tests market availability and pricing without any legal commitment.
Step 2: Buyer Issues ICPO
Once a credible seller is identified, the buyer issues a formal ICPO (Irrevocable Corporate Purchase Order). This is the binding commitment that initiates the deal. The ICPO must specify:
- Product: EN590 10ppm ULSD, compliant with EN 590:2013+A1:2017
- Volume: e.g. 50,000 MT per month × 12 months
- Price basis: Platts CIF NWE ± discount/premium, or fixed $/MT
- Delivery terms: FOB Rotterdam, CIF Singapore, etc.
- Payment: SBLC MT760 / DLC MT700, validity period
- Validity: 3–7 business days
Step 3: Seller Responds with FCO or RWA
The seller responds with a Full Corporate Offer (FCO) or Ready, Willing and Able (RWA) letter confirming product availability, price, delivery schedule, and requested payment terms. The RWA should include the tank storage terminal name and reference number.
Step 4: Sales and Purchase Agreement (SPA)
Buyer and seller negotiate and execute an SPA covering: product specification, quantity tolerances (typically ±5%), pricing formula, inspection terms, force majeure, and governing law. Standard SPAs reference GAFTA or FOSFA conditions adapted for petroleum products.
Step 5: Payment Instrument Issued
The buyer opens the agreed payment instrument:
- DLC (MT700) — Sent by issuing bank to advising bank, triggered by shipping documents
- SBLC (MT760) — Standby guarantee, drawn only if buyer defaults
The LC/SBLC must be irrevocable, confirm to UCP 600 (for DLC) or ISP98 (for SBLC), and have a validity of at least 30 days beyond the last shipment date.
Step 6: SGS/Intertek Inspection
An independent inspector from SGS, Intertek, or Bureau Veritas conducts quality and quantity verification at the loading terminal. The inspector produces:
- Certificate of Quality (CoQ) — confirms EN590 specification compliance
- Certificate of Quantity (CoQ) — confirms loaded metric tonnes
- Ullage Report — tank measurement before and after loading
Step 7: Loading, BL Issuance, and Payment
Product is loaded onto the vessel. The ship's captain issues the Bill of Lading (BL) confirming receipt. The seller presents the document package — BL, CoQ, Certificate of Origin, commercial invoice — to the bank for payment release under the DLC terms.
Standard Document Set for EN590 Trade
| Document | Issued by | Purpose |
|---|---|---|
| ICPO | Buyer | Binding purchase commitment |
| FCO / RWA | Seller | Product offer confirmation |
| SPA | Both parties | Full trade contract |
| DLC / SBLC | Buyer's bank | Payment security |
| Certificate of Quality | SGS / Intertek | Product specification proof |
| Certificate of Quantity | SGS / Intertek | Loaded volume confirmation |
| Certificate of Origin | Seller / Chamber of Commerce | Country of origin proof |
| Bill of Lading | Ship captain / carrier | Title transfer document |
| Commercial Invoice | Seller | Payment trigger document |
| Packing List | Seller | Cargo details |
Typical Transaction Timeline
| Stage | Duration |
|---|---|
| ICPO → SPA negotiation | 3–7 business days |
| SPA execution → DLC/SBLC issuance | 3–5 business days |
| DLC/SBLC → SGS inspection | 3–7 business days |
| Loading → Bill of Lading | 1–3 days |
| BL → payment release | 3–5 business days |
| Vessel voyage (FOB Rotterdam → CIF Singapore) | 20–28 days |
Frequently Asked Questions
- How does EN590 trading work?
EN590 trading follows a standard 7-step process: (1) Buyer issues ICPO specifying grade, volume, price, delivery terms; (2) Seller responds with FCO (Full Corporate Offer) or RWA; (3) Both parties execute an SPA (Sales and Purchase Agreement); (4) Buyer opens an SBLC or DLC via SWIFT MT760/MT700; (5) Seller arranges SGS/Intertek inspection at loading terminal; (6) Product loaded and Bill of Lading issued; (7) Payment released against shipping documents.
- What is the minimum order quantity for EN590?
Typical EN590 cargo sizes start at 25,000 MT (metric tonnes) for a single cargo voyage. The standard traded lot in Rotterdam spot market is 25,000–50,000 MT. Some suppliers offer smaller truck quantities (5,000–10,000 litres) for local distribution, but international trade begins at cargo scale.
- How long does an EN590 trade take from ICPO to delivery?
A typical EN590 transaction from ICPO to first delivery takes 21–45 days: 3–7 days for SPA negotiation, 3–5 days for DLC/SBLC issuance, 3–7 days for SGS inspection, 7–21 days for vessel voyage depending on delivery port.
- What is the standard payment term for EN590?
The most common payment terms are: DLC (Documentary Letter of Credit) via SWIFT MT700 for established relationships; SBLC (Standby Letter of Credit) via SWIFT MT760 for first-time transactions; or TT (Telegraphic Transfer) for repeat buyers with strong credit history.