May 2014
Methodology and Definitions Guide
CRU nickel and chrome and molybdenum Assessment methodology
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Ferromolybdenum 3 Molybdenum oxide
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Nickel 4 Chrome ore
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Ferrochrome 5
LONDON | BEIJING | MUMBAI | SANTIAGO | SYDNEY | PITTSBURGH | SAO PAULO
CRU NCM | May 2014
Methodology and Specifications Guide
CRU nickel, chrome and molybdenum: Price Assessment Methodology
All data are collected or reviewed by analysts with at least 5 years’ industry experience.
CRU’s methodology seeks to reflect the developing regulatory landscape for price assessment in general and the IOSCO principles set out in July 2013. CRU is constantly reviewing its practice to comply with the highest standards. This document sets out the current methodology.
A price point will remain active as long as it can be demonstrated that there are sufficient number of buyers and sellers and/or traders which allow for the analyst to make an assessment of the price. If the price suffers from limited transparency due to a lack of the above mentioned factors or as business dynamics change (such as a traditional trade route ceases to exist due to emergence of new market competition), it will be deactivated. Its history will still be available to clients for a fee, should they require this information. However, no further price information will be collected for that price from the time it is deactivated.
CRU collects nickel premia and chrome and molybdenum prices as part of its assessment of broader market conditions that are published in the NCM Monitors. NCM Monitor price and premia assessments are based on regular contact with as wide a network of market participants as possible. This network is constantly reviewed to ensure a balance of buyers and sellers, and actual activity in the market. We endeavour to record actual transactions and where possible to verify the details of these transactions with both sides. More weighting is given to transactions when assessing a price from a range of possible levels. However, some of the NCM markets can be relatively illiquid at times and we also consider bids and offers occurring in the market, judged against recent activity by those contacts. If no transactions for a specific commodity are reported during a particular reporting period, we take a mid-point price reflecting the spread between bids and offers. Transactions must meet the minimum volumes established in CRU’s methodology for individual prices; they must also meet all the other definitions set out in this document. CRU keeps notes of its interactions with market participants but these are treated as confidential and no details are shared with third parties.
Deactivated prices
Sizes and Specifications
Transaction sizes and specifications vary by commodity type details are listed below.
Timing
Assessments typically reflect latest transactions for product to be supplied within 30-45 days forward in the spot market. However, some US domestic transactions are only deemed spot if shipped within 14 days.
Revisions
CRU reserves the right to adjust its historical pricing assessments if compelling new evidence emerges. If you have comments or questions about the methodology used by CRU to assess prices, or questions about particular prices, please email
[email protected]. To find out more about CRU’s pricing products and services go to www.crugroup.com. Last edit: 30 May 2014
Frequency
Prices and premia are updated on a weekly basis. Weekly prices can reflect transactions concluded in the industry over the previous seven days; however, in practice greater weighting will be given to transactions in the days immediately prior to the day of publication.
Assessment Method
Analysts use telephone and email to collect market intelligence as well and to verify the information received. Price assessments reflect actual deals concluded and information is gathered through consultation with producers, buyers and traders. Published prices reflect the mid-point between the lowest and highest deal concluded during the week from Friday to Thursday, with a weighting towards the overall trend in the market towards the end of the reporting week, if a market is particularly volatile. If a market has been quiet during the week with no deals concluded prices are usually rolled over. However, if the overall market trend is strongly upwards or downwards, but no transactions were concluded for that price point, firm bids and offers are incorporated into the assessment.
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CRU NCM | May 2014
FERROMOLYBDENUM
Methodology and Specifications Guide
Duties/Tariffs: Duty paid
MOLYBDENUM OXIDE
Chinese FeMo Grade: 60% min Mo Price basis: DDP, gross weight Credit/Payment terms: Cash/Net 30 days Type: Spot Currency: Rmb Weight Unit: Metric tonne Size: 10 mt to 20 mt (partial and full truckloads) Timing: No more than two weeks forward, with some leeway for holiday Main Consumer Markets: Chinese mills Pricing: Business reported by sellers to buyers – no inter-trade activity Duties/Tariffs: Duty paid
US FeMo Grade: 65% min Mo – 0.5% Cu, 1.5% Si, 0.06% P, 0.1% C, 0.1% S. Price basis: US ex-warehouse Credit/Payment terms: Cash/Net 30 days Loading Location: Major US ports/warehouse; domestic destinations only Type: Spot Currency: US dollar Weight Unit: Pounds of Mo Size: 10 mt to 20 mt (partial and full truckloads) Timing: No more than two weeks forward, with some leeway for holiday Main Consumer Markets: US terminals/locations Pricing: Business reported by sellers to buyers – no inter-trade activity Duties/Tariffs: Duty paid
RN Western European FeMo Grade: 65% min Mo – 0.5% Cu, 1.5% Si, 0.06% P, 0.1% C, 0.1% S. Price basis: DDP Credit/Payment terms: Cash/Net 30 days Type: Spot Currency: US dollar Weight Unit: Pounds of Mo Size: 10 mt to 20 mt (partial and full truckloads) Timing: No more than two weeks forward, with some leeway for holiday Main Consumer Markets: European terminals/locations Pricing: Business reported by sellers to buyers – no inter-trade activity
US Moly Oxide Grade: 60% min Mo – 0.5% Cu, 0.1% P, lead and sulfur Price basis: US ex-warehouse Credit/Payment terms: Cash/Net 30 days Loading Location: Major US ports/warehouse Type: Spot Currency: US dollar Weight Unit: Pounds of Mo Size: 10 mt to 20 mt (partial and full truckloads) packed in bags or drums Timing: No more than two weeks forward, with some leeway for holiday Main Consumer Markets: US terminals/locations Pricing: Business reported by sellers to buyers – no inter-trade activity Duties/Tariffs: Duty paid
Western European Moly Oxide Grade: 60% min Mo – 0.5% Cu, 0.1% P, lead and sulfur Price basis: DDP Credit/Payment terms: Cash/Net 30 days Loading Location: Major Europe ports/warehouse Type: Spot Currency: US dollar Weight Unit: Pounds of Mo Size: 10 mt to 20 mt (partial and full truckloads) packed in bags or drums Timing: No more than two weeks forward, with some leeway for holiday Main Consumer Markets: Western Europe terminals/ locations Pricing: Business reported by sellers to buyers – no inter-trade activity Duties/Tariffs: Duty paid
Japan Moly Oxide Grade: 60% min Mo – 0.5% Cu, 0.1% P, lead and sulfur Price basis: cif main Japanese port Credit/Payment terms: Cash/Net 30 days Type: Spot Currency: US dollar Weight Unit: Pounds of Mo Size: 10 mt to 20 mt (partial and full truckloads) packed in bags or drums Timing: No more than two weeks forward, with some
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CRU NCM | May 2014
Methodology and Specifications Guide
leeway for holiday
Size: 10 mt to 20 mt (partial and full truckloads)
Main Consumer Markets: Japanese terminals/locations
Timing: No more than two weeks forward, with some leeway for holiday
Pricing: Business reported by sellers to buyers – no inter-trade activity Duties/Tariffs: Duty paid
Main Consumer Markets: EU terminals/locations Pricing: Business reported by sellers to buyers – no inter-trade activity Duties/Tariffs: Duty paid
NICKEL MOLYBDENU US Melting Premium Grade: 99.8% min Price basis: US ex-warehouse Credit/Payment terms: Cash/Net 30 days Loading Location: Major US ports/warehouse Type: Spot Currency: US cents Weight Unit: Pounds Size: 10 mt to 20 mt (partial and full truckloads) Timing: No more than two weeks forward, with some leeway for holiday Main Consumer Markets: US terminals/locations Pricing: Business reported by sellers to buyers – no inter-trade activity
EU Russian Full Plate Cathode Premium Grade: 99.8% min Price basis: Rotterdam, ex-warehouse Credit/Payment terms: Cash/Net 30 days Loading Location: Major US ports/warehouse Type: Spot Currency: US cents Weight Unit: Pounds Size: 10 mt to 20 mt (partial and full truckloads) Timing: No more than two weeks forward, with some leeway for holiday Main Consumer Markets: EU terminals/locations Pricing: Business reported by sellers to buyers – no inter-trade activity Duties/Tariffs: Duty paid
Duties/Tariffs: Duty paid
CHROME ORE
EU Melting Premium Grade: 99.8% min Price basis: Rotterdam, ex-warehouse Credit/Payment terms: Cash/Net 30 days Loading Location: Major US ports/warehouse Type: Spot Currency: US cents Weight Unit: Pounds Size: 10 mt to 20 mt (partial and full truckloads) Timing: No more than two weeks forward, with some leeway for holiday Main Consumer Markets: EU terminals/locations Pricing: Business reported by sellers to buyers – no inter-trade activity Duties/Tariffs: Duty paid
EU Plating Premium Grade: 99.8% min Price basis: Rotterdam, ex-warehouse Credit/Payment terms: Cash/Net 30 days Loading Location: Major US ports/warehouse Type: Spot Currency: US cents Weight Unit: Pounds
Turkish Chrome Ore – Spot Transaction Grade: 40-42% lumpy, 2:6:1 Cr to Fe ratio Price basis: CIF Chinese main port Credit/Payment terms: Cash/Net 30 days Packaging: Bulk, container Loading Location: Turkish main port Type: Spot Currency: US dollar Weight Unit: Dry metric ton Size: Multiple containers or larger Timing: No more than two weeks forward Main Consumer Markets: China inland terminals/ locations Pricing: Business reported by sellers to buyers – no inter-trade Duties/Tariffs: Duty paid
Turkish Chrome Concentrate – Spot Grade: 46-48% Cr Price basis: CIF Chinese main port
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CRU NCM | May 2014
Credit/Payment terms: Cash/Net 30 days Packaging: Bulk, container Loading Location: Turkish main port Type: Spot
South African UG2 Chrome Concentrate – Spot Grade: 42% Cr Price basis: CIF Chinese main port
Currency: US dollar
Credit/Payment terms:
Weight Unit: Dry metric ton Size: Multiple containers or larger Timing: No more than two weeks forward Main Consumer Markets: China inland terminals/ locations Pricing: Business reported by sellers to buyers – no inter-trade Duties/Tariffs: Duty paid
South African Chrome Ore – Spot Grade: 38-40% lumpy Price basis: CIF Chinese main port Credit/Payment terms:
Methodology and Specifications Guide
Cash/Net 30 days
Cash/Net 30 days
Packaging: Bulk, container Loading Location: South African main port Type: Spot Currency: US dollar Weight Unit: Dry metric ton Size: Multiple containers or larger Timing: No more than two weeks forward Main Consumer Markets: China inland terminals/ locations Pricing: Business reported by sellers to buyers – no inter-trade Duties/Tariffs: Duty paid
Packaging: Bulk, container
FERROCHROME
Loading Location: South African main port Type: Spot Currency: US dollar Weight Unit: Dry metric ton Timing: No more than two weeks forward
North American High-Carbon Ferrochrome – Spot
Main Consumer Markets: China inland terminals/ locations
Price basis: US Ex-warehouse, contained Cr
Size: Multiple containers or larger
Grade: 60-70% Cr, Carbon 6-8%, Silicon max 1.5%
Pricing: Business reported by sellers to buyers – no inter-trade
Credit/Payment terms: Cash/Net 30 days
Duties/Tariffs:
Loading Location: US warehouse
Duty paid
South African Chrome Concentrate – Spot Grade: 44% Cr Price basis: CIF Chinese main port Credit/Payment terms:
Cash/Net 30 days
Packaging: Bulk, container Loading Location: South African main port Type: Spot Currency: US dollar Weight Unit: Dry metric ton
Packaging: Bulk Type: Spot Currency: US cents Weight Unit: Pounds Size: Multiple truckloads Timing: No more than two weeks forward, with some leeway for holidays Main Consumer Markets: US inland terminals/locations Pricing: Business reported by sellers to buyers – no inter-trade Duties/Tariffs: Duty paid
Timing: No more than two weeks forward
European High-Carbon Ferrochrome – Spot
Main Consumer Markets: China inland terminals/ locations
Price basis: Delivered, Duty paid, contained Cr
Size: Multiple containers or larger
Grade: 60-70% Cr, Carbon 6-8%, Silicon max 1.5%
Pricing: Business reported by sellers to buyers – no inter-trade
Credit/Payment terms: Cash/Net 30 days
Duties/Tariffs: Duty paid
Loading Location: Rotterdam, plant
Packaging: Bulk Type: Spot Currency: US cents
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CRU NCM | May 2014
Weight Unit: Pounds Size: Multiple truckloads Timing: No more than two weeks forward, with some leeway for holidays Main Consumer Markets: European inland terminals/ locations
Methodology and Specifications Guide
North American Low-Carbon (0.05%) Ferrochrome – Spot Grade: 0.05% Carbon Price basis: US Ex-warehouse, contained Cr Credit/Payment terms: Cash/Net 30 days
Pricing: Business reported by sellers to buyers – no inter-trade
Packaging: Bulk
Duties/Tariffs: Duty paid
Type: Spot
Currency: US cents
North American Charge Chrome (HC FeCr) – Spot Grade: 47-55% Price basis: US ex-warehouse, contained Cr Credit/Payment terms: Cash/Net 30 days Packaging: Bulk Loading Location: US warehouse Type: Spot Currency: US cents
Loading Location: US warehouse
Weight Unit: Pounds Size: Multiple truckloads Timing: No more than two weeks forward, with some leeway for holidays Main Consumer Markets: US inland terminals/locations Pricing: Business reported by sellers to buyers – no inter-trade Duties/Tariffs: Duty paid
Size: Multiple truckloads
European Low-Carbon (0.05%) Ferrochrome – Spot
Timing: No more than two weeks forward, with some leeway for holidays
Price basis: Delivered, Duty paid, contained Cr
Weight Unit: Pounds
Grade: 0.05% C
Main Consumer Markets: US inland terminals/locations
Credit/Payment terms: Cash/Net 30 days
Pricing: Business reported by sellers to buyers – no inter-trade
Packaging: Bulk Loading Location: Rotterdam, plant
Duties/Tariffs: Duty paid
Type: Spot
European Charge Chrome (HC FeCr) – Spot Grade: 47-55% Cr Price basis: Delivered, Duty paid, contained Cr Credit/Payment terms: Cash/Net 30 days Packaging: Bulk
Currency: US cents Weight Unit: Pounds Size: Multiple truckloads Timing: No more than two weeks forward, with some leeway for holidays Main Consumer Markets: European inland terminals/ locations
Loading Location: Rotterdam, plant
Pricing: Business reported by sellers to buyers – no inter-trade
Type: Spot
Duties/Tariffs: Duty paid
Currency: US cents Weight Unit: Pounds Size: Multiple truckloads Timing: No more than two weeks forward, with some leeway for holidays Main Consumer Markets: European inland terminals/ locations
North American Low-Carbon (0.10%) Ferrochrome – Spot Grade: 60-65% Cr, 0.10% Carbon Price basis: US ex-warehouse, contained Cr Credit/Payment terms: Cash/Net 30 days
Pricing: Business reported by sellers to buyers – no inter-trade
Packaging: Bulk
Duties/Tariffs: Duty paid
Type: Spot
Loading Location: US warehouse Currency: US cents Weight Unit: Pounds Size: Multiple truckloads Timing: No more than two weeks forward, with some leeway for holidays
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CRU NCM | May 2014
Methodology and Specifications Guide
Main Consumer Markets: US inland terminals/locations
Loading Location: Producing plant
Pricing: Business reported by sellers to buyers – no inter-trade
Type: Spot
Duties/Tariffs: Duty paid
Weight Unit: Gross metric tonne (Rmb price); pounds (USD price)
European Low-Carbon (0.10%) Ferrochrome – Spot Grade: 60-65% Cr, 0.10% C Price basis: Delivered, duty paid, contained Cr Credit/Payment terms: Cash/Net 30 days Packaging: Bulk Loading Location: Rotterdam, plant Type: Spot Currency: US cents Weight Unit: Pounds Size: Multiple truckloads Timing: No more than two weeks forward, with some leeway for holidays Main Consumer Markets: European inland terminals/ locations Pricing: Business reported by sellers to buyers – no inter-trade Duties/Tariffs: Duty paid
Currency: Rmb and US cents
Size: Multiple truckloads Timing: No more than two weeks forward, with some leeway for holidays Main Consumer Markets: China inland terminals/ locations Pricing: Business reported by sellers to buyers – no inter-trade Duties/Tariffs: VAT paid
Japan Import High-Carbon Ferrochrome – Spot Grade: 49-70% Price basis: CIF major Japanese port, contained Cr Credit/Payment terms: Cash/Net 30 days Packaging: Bulk Loading Location: Producing ports Type: Spot Currency: US cents Weight Unit: Pounds
Chinese Import High-Carbon Ferrochrome – Spot Grade: 49-70% Price basis: CIF major Chinese port, contained Cr Credit/Payment terms: Cash/Net 30 days Packaging: Bulk Loading Location: Producing ports
Size: Multiple containers or larger Timing: No more than two weeks forward, with some leeway for holidays Main Consumer Markets: Japan inland terminals/ locations Pricing: Business reported by sellers to buyers – no inter-trade Duties/Tariffs: VAT unpaid
Type: Spot Currency: US cents Weight Unit: Pounds Size: Multiple containers or larger Timing: No more than two weeks forward, with some leeway for holidays
Japan Import Low-Carbon (0.10%) Ferrochrome – Spot Grade: 0.10% C Price basis: CIF major Japanese port, contained Cr
Main Consumer Markets: China inland terminals/ locations
Credit/Payment terms: Cash/Net 30 days
Pricing: Business reported by sellers to buyers – no inter-trade
Loading Location: Producing ports
Duties/Tariffs: VAT unpaid
Currency: US cents
Chinese Domestic High-Carbon Ferrochrome – Spot Grade: 49-70% (reported prices rationalized to 50% Cr basis) Price basis: Ex-warehouse or smelter, contained Cr Credit/Payment terms: Cash/Net 30 days Packaging: Bulk
Packaging: Bulk Type: Spot Weight Unit: Pounds Size: Multiple containers or larger Timing: No more than two weeks forward, with some leeway for holidays Main Consumer Markets: Japan inland terminals/ locations Pricing: Business reported by sellers to buyers – no inter-trade Duties/Tariffs: VAT unpaid
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