[SMM announcement] New Cobalt Carbonate quotation for SMM from May 25, 2020

I. General principles of SMM Price Methodology

Shanghai Nonferrous Network (hereinafter referred to as SMM) is a completely independent third-party service organization, which does not participate in any substantive transactions, but maintains close communication with the buyer or seller of the transaction as a market observer or organizer, and provides relevant services for the market. By communicating with industry insiders, SMM continuously develops, reviews and revises its methodology to adopt 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 unreliable or unrepresentative from its quotation evaluation.

SMM publishes daily spot metal prices (or indices, etc., including the Chinese market or markets outside China), often referred to as SMM prices. SMM has formulated the corresponding methodology for the published SMM prices (all will be published on SMM's official website www.smm.cn for inquiry). The methodology stipulates the methods and procedures for the formation and release of SMM prices, and forms 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 necessary amendments to the SMM price methodology and announce it on SMM's official website www.smm.cn before its formal implementation. If you have any questions or suggestions about SMM price and its methodology, please contact SMM customer service personnel (please check the contact information on SMM's official website www.smm.cn).

This document sets out the setting standards and management methods for the spot price of SMM cobalt carbonate. The purpose of SMM in formulating this standard is to establish a transparent and verifiable SMM pricing mechanism to provide an important pricing indicator for market participants.

The SMM benchmark Management Committee also reviews the methodology and its evaluation and release process on a regular basis. The committee maintains oversight of the SMM methodology and the compilation process and ensures that the price or index reflects the physical spot market of the relevant goods as truthfully as possible. If the Committee considers that there are any problems, it will immediately point them out and propose external consultations and modifications to the methodology or process being implemented in order to improve the quality of the prices or indices published by SMM. The Committee can only propose changes to the methodology and steps used in future price or index evaluations, and it cannot change published prices or indices.

II. The formation of SMM Cobalt Carbonate spot Price

1. Definition

SMM Cobalt Carbonate spot Price is an evaluative price formed and issued by SMM in accordance with this methodology and can be used by both parties as a reference for the settlement of Cobalt Carbonate spot trade. The price reflects the actual transaction price of each enterprise when the spot quotation of SMM cobalt carbonate is released on each full working day, as well as the price evaluation range that is most likely to be delivered to the spot transaction. The price is mainly based on the price situation of spot transactions across the country on that day, including related fees in transportation, taxes, capital occupation costs and other related trade expenses.

2. A brief introduction to the mode of formation

SMM collects the data information used to evaluate the spot price of cobalt carbonate by adopting the standard (that is, collecting the original data information in accordance with the SMM standard), including the quotation of the buyer and seller who did not conclude the transaction on the day provided by the bid unit (that is, the data provider), the actual transaction price of the transaction provided by the bid unit, and so on. The quantity of each transaction such as quotation or transaction of cobalt carbonate that can be included in the standard should not be less than 20 physical tons.

3. The method of adopting the standard

According to the agreement of the bid-adopting unit, the price analyst will regularly collect data and information about the spot price of cobalt carbonate from the contact person of the bid-adopting unit by telephone, QQ, WeChat, fax and e-mail on a regular basis (between 09:30 and 11:30 on each trading day). The price data information submitted in excess of 11:30 will not be used as a basis for price evaluation for the day. Incomplete data that does not contain the minimum information details required will not be included in use even if submitted before the deadline. The price data information may include the price that has been closed on the same day, the price that has not been taken into account on the previous day but has been closed, the expected most likely pending price, offer, counter-offer, and so on. All instant messaging content, email communication content and any face-to-face communication records will be archived; phone communication details will be summarized and entered into the database. The price data information must be a typical, repeatable transaction between non-affiliated market participants (financially and legally independent).

SMM price analysts are required to observe a code of business ethics when reporting to their supervisors any forced or threatened communication from market participants, or any kind of induced offer that attempts to influence the outcome of the assessment.

4. Pricing units and forms of expression

RMB 10,000 yuan / ton; presented in the form of range, including tax price (including 13% VAT)

III. Change of methodology

All markets are changing, and SMM is responsible for ensuring 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 substantive and non-urgent potential changes. Major changes are then announced and at least 28 days' notice is given, inviting comments from the industry, unless special circumstances, especially force majeure (natural disasters, wars, exchange bankruptcies, etc.) shorten the notice period. SMM promises to scrutinize all comments about 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 cobalt carbonate report at least once a year. The date of the last consultation and the deadline of the SMM's commitment to hold the next consultation are at the top of the methodology document. For details, see SMM Methodology Review and Policy change.

Welcome more related enterprises to participate in the industry chain, if in doubt, you can call to consult: Shanghai Nonferrous Network New Energy Research team

Huo Yuan's contact information: 021Mui 5166 6898