PRICING NOTICE: Proposal to amend Fastmarkets’ cif Shanghai ferro-chrome index

Fastmarkets proposes to change its cif Shanghai ferro-chrome index to a single-figure price assessment and change the location from Shanghai to main Chinese ports

Subject to market feedback, Fastmarkets will change the specification of the ferro-chrome index 50% Cr import, cif Shanghai, $/Ib

Consolidation in the ferro-chrome market means the number of sell-side data sources has fallen since Fastmarkets started its ferro-chrome index in 2012.

Indices - tonnage-weighted average calculations - best work in liquid markets that can reliably contribute sufficient robust indications to the calculation.

The lower volume of data points in relation to the imported ferro-chrome market in China has made the use of an index less suitable. Low availability of data and the calculation process in an index mean the price is more susceptible to being moved by low volume of trade information than if it was an assessment.

Illiquid markets with a relatively low number of participants are more accurately reflected as an assessment.

Therefore, Fastmarkets proposes to use an assessment process rather than an index.

Fastmarkets proposes a single-figure assessment rather than a range because a single price provides simplicity to the market and cohesion for users.

Additionally, Fastmarkets proposes to amend the delivery port from “Shanghai (other ports normalized)” to “Main Chinese ports”. This proposal reflects that Shanghai is not currently a major destination port for imported ferro-chrome in China.

The proposed specification is as follows:

Assessment: Ferro-chrome 50% Cr import, cif main Chinese ports, $/Ib contained Cr
Quality: 10-100mm lump. Chrome base 50%, range 48-52%; carbon base 7%, max 9%; silicon base 3%, max 6%; phosphorous max 0.03%; sulfur max 0.06%
Quantity: Min 1,000 tonnes minimum
Location: cif main Chinese ports
Timing: Within 6 weeks
Unit: USD per lb
Payment terms: LC at sight
Publication: Weekly. Friday 3pm London time
Notes: Seaborne, all origins.
Data history from May 2012

The consultation period for this proposed amendment will end one month from the date of this pricing notice, on December 2, with changes taking place, subject to market feedback, from December 6.

To provide feedback on this price or if you would like to provide price information by becoming a data submitter to this price, please contact Jon Stibbs by email at: pricing@fastmarkets.com. Please add the subject heading FAO: Jon Stibbs, re: Ferro-chrome index.

To see all Fastmarkets’ pricing methodology and specification documents go to https://www.fastmarkets.com/about-us/methodology.

Susan Zou

susan.zou@metalbulletinasia.com

Jon Stibbs

jon.stibbs@fastmarkets.com

Published

Susan Zou

Jon Stibbs

November 04, 2019

16:43 GMT

London, Shanghai