[SMM announcement] formulation Standard of spot quotation for (SMM) Ethylene Glycol Antimony in Shanghai Nonferrous Network

1. General principles of SMM pricing methodology

Shanghai Nonferrous Network (hereinafter referred to as SMM) is a completely independent third-party service organization, does not participate in any substantive transactions, but as a market observer or organizer to maintain close communication with the buyer or seller of the transaction, and provide relevant services for the market. Through communication with the industry, SMM continues to develop, review and revise its methodology, adopting the most common product specifications, terms of trade and terms of trade in the industry. And pay equal attention to the normal transactions that meet the specifications and standards. SMM reserves the right to exclude any price information deemed to be less reliable or unrepresentative from its quotation judgment.

SMM publishes spot metal prices (or price indices, including China, non-China and global markets) on a daily basis, commonly referred to as SMM prices. SMM has formulated the corresponding methodology for the published SMM prices (all of which will be published on the official website of SMM www.smm.cn for inquiry). The methodology specifies the methods and procedures for the generation and release of SMM prices, and produces and publishes SMM prices in strict accordance with the provisions of the methodology.

In order to meet the actual situation of the spot market, SMM will make the necessary revisions to the SMM pricing methodology and announce it on the official SMM website www.smm.cn 28 days before it is officially implemented. If you have any questions or suggestions about SMM pricing and its methodology, please contact SMM customer service personnel (please contact www.smm.cn on the official SMM website).

This document sets out the criteria for the spot quotation of SMM ethylene glycol antimony, which was developed by SMM for the purpose of establishing a transparent and verifiable SMM pricing mechanism.

2. Generation of spot quotation for SMM ethylene glycol antimony

2.1 definition of price

SMM ethylene glycol antimony spot quotation is an indicative price produced and issued by SMM according to this methodology and can be adopted by both parties as a reference for the settlement of ethylene glycol antimony spot trade. This price reflects the factory spot transaction price range that is most likely to close before the release time of the SMM ethylene glycol antimony spot quotation per full working day. The price can also be based on the trade price of a specific region (such as Shanghai, etc.) on the same day, deducting transportation costs, taxes, capital occupation costs and other related costs.

2.2 method of generating prices

SMM obtains the spot price information of ethylene glycol antimony by the way of standard bid acquisition, which includes the quotation of the buyer and seller on the same day provided by the bid acquisition unit, the actual spot transaction price provided by the bid acquisition unit, and so on. The amount of ethylene glycol antimony that can be included in the standard bid price should not be less than 5 tons per transaction.

2.3 Source of price information

2.3.1 Price per unit of bid

2.3.1.1 Evaluation criteria for standard mining units

According to the following criteria, SMM will select representative enterprises from within the industry chain as the standard for the spot quotation of SMM ethylene glycol antimony (including smelting enterprises, trading enterprises and downstream enterprises).

2.3.1.1.1 smelting enterprises

a. With an annual production capacity of more than 500 tons, ethylene glycol antimony has a standardized sales model, smooth sales channels, relatively stable sales quantity, certain influence and popularity, legal and honest management, and good reputation in the market.

b. Can objectively and truthfully feedback the actual situation of the production and sales of ethylene glycol antimony, including output, operating rate, product quality, sales price, sales quantity, sales direction, product inventory, etc., and can maintain good communication with SMM price analysts.

c. Has certain research and expectation to the macroeconomic situation, the ethylene glycol antimony industry present situation and the ethylene glycol antimony market transaction, and can maintain the good communication with the SMM price analyst.

2.3.1.1.2 Trading Enterprises

a. Engaged in ethylene glycol antimony spot trade for more than two years, the average annual purchase and sales volume of more than 800 tons, there are standardized purchase and sale model, smooth purchase and sale channels, relatively stable purchase and sale quantity, have a certain influence and popularity, legal and honest management, the market reputation is good.

B. Be able to objectively and truthfully feedback the actual situation of the purchase and sale of ethylene glycol antimony, including product quality, purchase and sale price, purchase and sale quantity, purchase source and sales destination, product inventory, etc., and be able to maintain good communication with SMM price analysts.

C. Have certain research and expectation on macroeconomic situation, current situation of ethylene glycol antimony industry and ethylene glycol antimony market trading, and can maintain good communication with SMM price analysts.

2.3.1.1.3 downstream Enterprises

A. The annual purchase volume of ethylene glycol antimony is more than 500 tons, with standardized procurement mode, smooth procurement channels, relatively stable procurement quantity, certain influence and popularity, legal and honest management, and good reputation in the market.

B. Can objectively and truthfully feedback the actual situation of ethylene glycol antimony procurement, including product quality, purchase price, purchase quantity, purchase source, ethylene glycol antimony inventory, etc., and can maintain good communication with SMM price analysts.

C. Have certain research and expectation on macroeconomic situation, current situation of ethylene glycol antimony industry and ethylene glycol antimony market trading, and can maintain good communication with SMM price analysts.

2.3.1.1.4 Target list of bid acquisition units

Note: regardless of ranking, SMM will adjust the list accordingly in accordance with the provisions of this standard.

SMM's policy on market data is that SMM welcomes all information from various sources or organizations, as long as it is provided for good and real purposes.

2.3.1.2 formation and adjustment of the list of bid-picking units

SMM selects the bid acquisition units according to the above criteria, and forms a relatively stable list of standard acquisition units. In order to ensure the smooth development of the standard collection work, SMM will sign a formal bid confirmation agreement with each bid acquisition unit to ensure that the price information is accurate and timely. At the same time, the enterprise secrets of the standard acquisition units shall be protected. SMM arranges the full-time price analyst to collect the bid from the full-time bid acquisition contact person arranged by the bid acquisition unit, and communicate the price information and the market situation. SMM will continuously evaluate each bid acquisition unit according to the above criteria and adjust the list of bid acquisition units based on the evaluation results. For those units whose evaluation results do not meet the above criteria, SMM will list them as pending rectification and notify them of the deadline for rectification. If, within 30 days after the issuance of the rectification notice, the enterprise refuses to rectify or fails to meet the standard after rectification, SMM will terminate its qualification as a bid-adopting unit. SMM does not accept instant messaging requests from unidentified people and requires analysts to confirm the identity of market participants before instant messaging.

2.3.1.3 method of standard collection

According to the bid acceptance agreement, SMM will collect the spot price information of ethylene glycol antimony from the bid acquisition focal point of the bid acquisition unit by telephone, QQ, WeChat, fax and mail (each trading day). The price information includes the price that has been completed on the day, the most likely price to be completed by the enterprise, and so on. All instant messaging content, email communication content and any records of face-to-face communication will be archived. Details of the telephone communication will be recorded and recorded in the database. This information is a typical and repeatable transaction between people in non-related markets.

SMM analysts are subject to the Compliance regime when reporting to their executives any forced or threatened communication among market participants, or any induced offer that attempts to influence the assessment.

2.4 formation and related regulations of spot quotation for SMM ethylene glycol antimony

SMM will be based on the results of the price range produced by the standard price range of the bid enterprise (this price range will generally exist in the state of the price range, and these price data will be recorded electronically and in writing. All paper records need to be signed and retained for a long time), taking into account the offer and counter-offer level of the corresponding market, spot market, futures or electronic market, macroeconomic, industry status, market transactions, supply and demand, inventory level, and other political, economic, natural and other major factors; And for quotations or transactions with doubts about the accuracy of the original information, unduplicable quotations or transactions or obviously abnormal quotations or transactions, SMM will remove them from the basis of price evaluation.

At 11: 00-11: 30 on each trading day, the spot price range of SMM ethylene glycol antimony is publicized, and because the price reported by SMM is defined as the spot transaction price range, if the regional price range such as Shanghai is adopted under special circumstances, the corresponding transportation expenses, tax revenue, capital occupation cost and other related costs should be subtracted, and finally the most likely actual price range should be determined.

For a particular commodity or commodity in a specific period of lack of liquidity, in the absence of reliable and proven market information, SMM reserves the right to evaluate a particular commodity or commodity in the light of production economy, product relevance, freight and forward market.

SMM will refer to the following standards and regulations to form a spot quotation for SMM ethylene glycol antimony and post it on the official SMM website. After the price is released, SMM will not revise or adjust it on the same day.

According to the experience of tracking and feedback on the market of other varieties of SMM quotation over the past few years, SMM adopts interval price evaluation strategy for ethylene glycol antimony price evaluation, while other evaluation strategies, such as weighted average, are vulnerable to random changes in transaction level and volume, resulting in data distortion. In addition, because the specific transaction volume of any product can not be predicted in advance, the price evaluation methodology based entirely on trading volume has the following disadvantages: 1. Small trading volume will affect the accuracy of the price; 2. If the deal is not concluded, it will not be possible to conduct a price assessment.

In view of the fact that trading is sometimes scarce in the market, SMM does not set a minimum data threshold for the assessment methodology for such a particular market period.

2.4.1 Product Standard

Ethylene glycol antimony: in line with the national recommendation: "YS/T 972-2014 ethylene glycol antimony".

2.4.2 main ethylene glycol antimony circulation brands and production enterprises

Note: the ranking is out of order.

2.4.3 reference number of transactions

SMM defines the typical trading volume that reflects market circulation as more than 5 tons per transaction.

2.4.4 Mode of delivery

The seller delivers the goods; the mode of transportation is motor transport, train

2.4.5 terms of payment

Cash remittance from the bank, arrival on the same day; 30 days of monthly settlement of the goods

2.4.6 place of delivery

Delivery at the designated place of the buyer

2.4.7 Unit of valuation

RMB / ton

2.4.8 forms of expression

Presented in interval form, including tax value (including 13% VAT)

2.4.9 release time

Before 11:30 on each working day (except statutory holidays and weekends)

2.5 quoting process

SMM carries out the quotation of SMM spot ethylene glycol antimony from 9: 30 a.m. to 11: 00 a.m. each working day. The specific process is as follows:

2.6 methodological changes

All markets are changing, and SMM has a responsibility to ensure that the methodology for market reporting changes synchronously with the market. As a result, SMM conducts regular internal reviews of the appropriateness of the methodology based on industry feedback. SMM will follow the formal external consultation process for all potential changes that are substantive and not urgent. It then announces major changes and gives a notice period of at least 28 days, inviting industry members to comment, unless special circumstances, especially force majeure (natural disasters, war, exchange bankruptcy, etc.) cause the notice period to be shortened. SMM promises to scrutinize all comments on the proposed methodological changes, but in some cases it may have to change the methodology against the wishes of some market participants. In addition, SMM has a formal methodological consultation process. SMM promised to hold a formal consultation on the methodology every three years. The date of the last consultation and the deadline for SMM's commitment to hold the next consultation are at the top of the methodology document.