Regarding the Addition of Thailand USD Copper Premium (CIF B/L) [SMM Announcement]

SMM (Shanghai Metals Market) Thailand CIF Copper Premium (B/L) Quotation Standards

SMM Price Assessment Methodology General Principles
Shanghai Metals Market (hereinafter referred to as SMM) is a completely independent third-party service organization that does not participate in any substantive transactions. Instead, it maintains close communication with buyers or sellers in transactions as a market observer or organizer and provides relevant services to the market. SMM continuously formulates, reviews, and revises its methodology through communication with industry participants, adopting the most common product specifications, trade terms, and conditions in the industry. Equal emphasis is placed on normal transactions that meet specification standards. SMM reserves the right to exclude any price data deemed less reliable or unrepresentative from its price assessments.

To align with the actual conditions of the spot market, SMM will make necessary revisions to the SMM price assessment methodology and announce the changes on the SMM official website (www.smm.cn) three days before implementation, unless under special circumstances, particularly force majeure (natural disasters, wars, exchange bankruptcies, etc.), which may shorten the notification period. For any questions or suggestions regarding SMM prices and their methodology, please contact SMM customer service (contact information available on the SMM official website www.smm.cn).

This document specifies the standards and management methods for SMM CIF Thailand copper premium quotations. The purpose of establishing this standard is to create a transparent and verifiable SMM pricing mechanism, providing an important pricing benchmark for market participants.

The SMM Benchmark Management Committee will also regularly review the methodology and its assessment and publication processes. This committee supervises the SMM methodology and compilation process, ensuring that the prices or indices reflect the objective conditions of the relevant physical spot market as accurately as possible. If the committee identifies any issues, it will immediately point them out and propose external consultation and amendments to the methodology or processes being implemented to improve the quality of SMM-published prices or indices. The committee can only propose modifications to the methodology and steps used for future price or index assessments; it cannot alter already published prices or indices.

2. Formation of SMM CIF Thailand Copper Premium

Background: Currently, the Thai copper cathode market is in a state of undersupply and relies on imports, with most refined copper imports sourced from China, Japan, South Korea, etc. Although the Thai copper market is primarily dominated by long-term contracts, the spot market activity is relatively low. However, under the market's supply-demand dynamics, premiums have remained at a relatively high level for years, attracting certain market attention. Due to local policy incentives and changes in international conditions, an increasing number of downstream enterprises are establishing subsidiaries in Thailand, leading to a growing demand for CIF Thailand copper pricing. The market urgently needs a transparent and fair price.

Definition:
The SMM CIF Thailand copper premium is an indicative price formed and published by SMM based on this methodology. It can be used by trading parties as a reference for settlement in Thailand copper spot trades. This price reflects the actual transaction or potentially transactable spot trading price range for CIF Thailand copper premium at the time of publication on each full working day. It will officially launch on January 24, 2025, and historical prices will be available on the SMM official website (smm.cn and SMM Thailand website www.metal.com/th/home).

Definition: CIF to Thailand, the trading premium of LME-registered Grade A copper brands relative to LME spot prices. The main unloading ports for copper cathode in Thailand are Bangkok Port and Laem Chabang Port, with enterprises selecting the destination port based on their geographical location.

Source of Original Data

2.1 Price Collection from Price Submitters

2.1.1 Requirements for Smelters
- Must have a standardized sales model, smooth sales channels, relatively stable sales volumes, a certain level of influence and reputation, and operate legally and with integrity, maintaining a good market reputation.
- Must objectively and truthfully report the actual production and sales conditions of the enterprise, including production, operating rate, product quality, selling price, sales volume, sales destinations, product inventory, etc., and maintain good communication with SMM price analysts on these matters.
- Must have some insights and expectations regarding macroeconomic conditions and the Southeast Asian spot market and maintain good communication with SMM price analysts on these matters.

2.1.1.1 Requirements for Traders
- Must have been engaged in copper spot trading for over two years, with an average annual purchase or sales volume exceeding 50,000 mt on a single side, a standardized purchase and sales model, smooth purchase and sales channels, relatively stable purchase and sales volumes, a certain level of influence and reputation, and operate legally and with integrity, maintaining a good market reputation.
- Must objectively and truthfully report the actual copper procurement and sales conditions of the enterprise, including product quality, purchase and sales prices, purchase and sales volumes, sources of procurement and sales destinations, product inventory, etc., and maintain good communication with SMM price analysts on these matters.
- Must have some insights and expectations regarding macroeconomic conditions, the Southeast Asian copper market industry status, and market transactions, and maintain good communication with SMM price analysts on these matters.

Requirements for Downstream Enterprises
- Must objectively and truthfully report the actual copper procurement conditions of the enterprise, including product quality, purchase prices, purchase volumes, sources of procurement, inventory, etc., and maintain good communication with SMM price analysts on these matters.

2.1.2 Price Collection Methods
SMM will collect price data from price submitters' designated contacts through price analysts via telephone, QQ, WeChat, fax, and email regularly (between 10:00 and 11:30 a.m. on each trading day). Price data submitted after 11:30 a.m. will not be considered for the day's price assessment. Incomplete data lacking the minimum required details will not be used even if submitted before the deadline. The price data may include prices of concluded transactions, expected most likely pending transaction prices, offers, counteroffers, etc. The frequency of price collection will depend on the trading volume and frequency of each price submitter, and not all contracted units will be contacted daily, but at least once a week.

Thailand Copper Specifications
- LME-registered Grade A copper cathode as the benchmark.

Transaction Price/Counteroffer/Offer, etc.
- The quotation includes the price data of the price submitter's own concluded transactions, counteroffers, or offers, as well as those of other market participants or market price ranges, in $/mt.

Quantity
- Single transaction volume of 100 mt or more.

Payment Terms
- Payment terms under negotiated trade agreements, such as bank remittance, letter of credit, etc.

2.2.1 Price Publication
SMM will form the CIF Thailand copper spot price based on the following standards and regulations and publish it on the SMM official website (www.smm.cn).
- Publication time: 11:30 a.m. on each Chinese statutory working day.
- Publication time may be affected by emergencies and force majeure factors, such as power outages and natural disasters. In such cases, SMM will make every effort to notify the market of the delayed publication time as soon as possible.

2.2.2 Modifications to Published Prices
If errors are found after the price is published, whether due to incorrect operations or calculation errors, SMM will promptly issue a correction notice and amend the error.

2.2.3 Key Points Review

2.2.3.1 Price (Product) Standards
- CIF Thailand copper premium: Complies with LME-registered Grade A copper cathode standards.

2.2.3.2 Major Registered Copper Brands Circulating in Southeast Asia

Note: The ranking is not in order. The SMM CIF Thailand copper premium spot price represents but is not limited to the above brands.

2.3.1 Delivery Method
- B/L delivery.

2.3.2 Payment Methods
- LC, DP, TT, cash remittance.

2.3.3 Delivery Location
- Delivered to the port.

2.3.4 Pricing Unit
- $/mt.

2.3.5 Presentation Format
- Presented in a range, as a tax-exclusive price in US dollars.

2.3.6 Publication Time
- 11:30 a.m. on each trading day (excluding Chinese statutory holidays and weekends).

2.4 Price Assessment Process
SMM conducts the SMM Thailand copper spot price assessment process every working day from 10:00 to 11:30 a.m.

2.5 Methodology Changes
All markets evolve, and SMM has the responsibility to ensure that its reporting methodology evolves with the market. Therefore, SMM will conduct regular internal reviews of the methodology's appropriateness based on industry feedback. For all substantive but non-urgent potential changes, SMM will follow a formal external consultation process. Major changes will then be announced with at least 28 days' notice, inviting industry comments, unless under special circumstances, particularly force majeure (natural disasters, wars, exchange bankruptcies, etc.), which may shorten the notification period.

For any inquiries, please contact SMM at 021-20707848, contact person: Shaoxue Yu.