With the continuous improvement and perfection of the copper industry chain in southwest China, southwest China has gradually grown into one of the important gathering places for smelting, processing and terminal of copper industry in China. In response to the market demand, through SMM research, it will be officially launched on June 1, 2020, "SMM Southwest Electrolytic Copper spot Price (Daily)" and "SMM Southwest 8 copper rod spot processing fee (weekly)".
General principles of SMM Price Methodology
Shanghai Nonferrous net Information Technology Co., Ltd. (hereinafter referred to as SMM) is a completely independent third-party service organization that 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, adopts the most common product specifications, terms and conditions of trade in the industry, and attaches equal importance to normal transactions that meet specification standards. SMM reserves the right to exclude any price information deemed to be unreliable or unrepresentative from its quotation judgment. SMM publishes daily spot metal prices (or price indices, including markets outside China and China), often referred to as SMM prices. SMM has established a rigorous 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 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 necessary amendments to the SMM price methodology and announce it on the official website of SMM before the official implementation date. 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 standard for setting the price of copper in the southwest of SMM. The purpose of SMM in formulating this standard is to establish a transparent and verifiable SMM pricing mechanism.
The emergence of Copper Price in Southwest China
Brief introduction of Copper Industry in Southwest China
Southwest Sichuan-Chongqing region, as the region with the densest population, the most concentrated industries and the highest urban density in western China, the high-tech and manufacturing industries in Sichuan Province are developing rapidly. Chongqing has a strong manufacturing foundation and a high industrial level. In recent years, the economic growth rate is in the forefront of the country. Copper processing is an industry actively supported by the government in this region, where wire and cable enterprises, copper pipe production enterprises, copper bar production enterprises, as well as enamelled wire, automobile wire and other enterprises are constantly developing and expanding production capacity. Powerful copper processing enterprises in coastal areas have also actively set up factories in Sichuan and Chongqing to relocate part of their production capacity. The copper processing industry in this area is developing especially rapidly. It is another copper processing industry gathering area after the Yangtze River Delta and the Pearl River Delta. It has a very broad space for development.
The significance of the Copper Price in the Southwest of SMM
There are many key enterprises in the copper industry in southwest China. The enterprise coverage is as follows: China Copper Co., Ltd., Foshan Xinghai Copper and Aluminum Co., Ltd., Henan Zhongyuan Gold smelter Co., Ltd., Chongqing Shenyun Metal Materials Co., Ltd., Zhejiang Hailiang Co., Ltd., Trafigura Investment (China) Co., Ltd., Lingbao Gold Group Co., Ltd., Jinlong Precision Copper Group Co., Ltd., Ningbo Jintian Copper (Group) Co., Ltd., Jinchuan Group Co., Ltd., Qinghai Copper Co., Ltd., AVIC Baosheng (Sichuan) Cable Co., Ltd., Xinjiang Wuxin Copper Co., Ltd., Sichuan Taigli Technology Co., Ltd., Sichuan Xinruixin Metal material Co., Ltd., etc.; Copper products cover many categories, forming an industrial chain of copper raw materials-copper smelting-copper processing and manufacturing-copper application. The southwest spot quotation has a great influence in the market, which provides some guidance for the market quotation. In view of this, in order to serve the relevant enterprises of the copper industry chain, provide them with prices that truly reflect the spot market, and constantly improve and deepen the research of the copper industry chain, SMM will officially release the southwest copper price of SMM from June 1, 2020, mainly for the spot price of electrolytic copper in the southwest of SMM (daily) and the spot processing fee of SMM southwest copper pole (weekly).
Definition of price
SMM southwest copper price includes SMM southwest copper spot price (daily) and SMM southwest copper pole spot processing fee (weekly), which is an indicative price produced and issued by SMM according to this methodology and can be used by both parties as a reference for trade settlement. This price reflects the local tax withholding price range in which the SMM southwest copper price is most likely to be traded before the release time of the SMM southwest copper price in each complete quotation cycle, at which time SMM price members can check the historical price at the same time.
The method of producing price
SMM obtains the spot price (daily degree) of SMM southwest electrolytic copper and the spot processing fee information of SMM southwest copper rod (weekly) through standard adoption. Every day, the buyer is designated to inquire the bid unit, and the inquiry information is entered into the SMM internal system, and the southwest copper price is formed in strict accordance with the IOSCO certification process. On the basis of the spot transaction price collected from the main body of the southwest market, the market transaction price jointly confirmed by both buyers and sellers must meet the requirements of fairness, negotiability, replicability and so on. The standard collection price includes the actual transaction price of the spot that has been concluded by the local standard acquisition enterprise.
The method of adopting the standard
According to the bid acquisition confirmation agreement, SMM will regularly collect price information from the bid acquisition contact person of Southwest Copper Industry by telephone, QQ, WeChat, fax and email, etc. The price information includes the closed price, the most likely pending transaction price of the enterprise, etc., and all instant messaging, e-mail communication and any face-to-face communication records will be archived. Details of telephone communication will be recorded and entered into the database. SMM analysts are required to comply with the "compliance system" when reporting to their supervisors any forced or threatened communication from market participants, or any induced offer that attempts to influence the assessment. After the price is released, SMM will not revise or adjust it on the same day.
Product standard
(1) the spot price of electrolytic copper in the southwest of SMM: the spot price of electrolytic copper in southwest China is in line with the national standard of GB/T467-2010, which is mainly related to brands including Tiefeng, Xikuang, Zhongyuan, Tianfu, Lingbao, etc.; the spot price of electrolytic copper is divided into two parts: full price and rising water, quoted in RMB / ton; the published price is the local tax-free price (including 13% VAT); the quotation frequency is once a day.
(2) spot processing fee of SMM southwest copper pole: the spot processing fee of southwest local copper rod for the current month contract of Shanghai Futures Exchange, the price standard is the trading price of 8mm copper wire billet for copper pole electrician in accordance with the national standard of GB/T3952-2016; quotation unit: RMB / ton; the published price is the local self-raised price including tax (including 13% VAT); the quotation frequency is once a week.
Release time
(1) 10 15 per trading day, announce the spot discount and spot price range of electrolytic copper in southwest China on the home page of SMM official website, copper special area and handheld colored APP.
(2) on the last working day of each week, the spot processing fee for 8mm copper rods in southwest China will be announced on the home page of SMM official website, copper special area and handheld colored APP.
Methodology change
The market is evolving all the time, 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 promises to hold formal consultations on methodology every three years. 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. Welcome more related enterprises in the industry chain to participate in and support SMM to better serve the related enterprises in the copper industry.
If in doubt, please call:
Chen Ming, copper research team of Shanghai Nonferrous net, contact: 021MU51595816
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