With the rapid development of the new energy industry, the battery grade nickel sulphate market is experiencing a series of changes. In order to adapt to such changes in the battery grade nickel sulphate (crystal) market (for example, the integrated production of battery grade nickel sulphate and ternary cathode material precursors as well as tolling of battery grade nickel sulphate though long-term orders now account for more than 90% of the total nickel sulphate production; the market lacks stylised transactions that could represent the mainstream transactions in the market due to lower frequency of transactions in the spot market), and to further reduce the transaction risks and costs across the battery grade nickel sulphate industry chain by referring to SMM Price, SMM has been constantly improving and deepening its research on the battery grade nickel sulphate industry chain. After prudent information accumulation and market research, SMM has decided to launch the item of SMM Battery Grade Nickel Sulphate Price Index starting from September 1, 2022, which is designed to replace the original item of SMM Battery Grade Nickel Sulphate Price. The original item will be retained simultaneously until December 31, 2022.
Guidelines to SMM price assessment methodology
Shanghai Metals Market (“SMM”) is an independent service provider that does not participate in trades. SMM is a market observer that engages buyers and sellers in the commodities market. By consulting with independent industry participants, SMM drafts the methodology, examines and revises it regularly based on the specifications and terms of trade that are generally used in the market, with equal weighting given to transactions that meet the standards. SMM reserves the right to exclude any unreliable or unrepresentative price data from its price assessment, in line with this methodology and other related Benchmark governance policies and procedures.
SMM Price refers to metals spot prices or price indices of both the Chinese and overseas markets reported by SMM on a daily basis. All SMM prices are published according to a set of defined methodologies, indicating how the prices are accessed and reported. These methodologies are published on our website www.metal.com (English) or www.smm.cn (Chinese) or for all market participants to understand and refer to.
To reflect the actual trades in the spot market, SMM will update the methodology for SMM price assessments and publish all the revisions on our website www.metal.com (English) or www.smm.cn (Chinese). For queries or suggestions on the methodology, please contact SMM customer services (please find contact information on the SMM official websites). Please read this paragraph in conjunction with the SMM methodology review and changes policy, and the SMM Complaint Policy available at www.metal.com (English) or www.smm.cn (Chinese).
This document specifies the standards and management methods for the SMM Battery Grade Nickel Sulphate Price Index assessment, which are formulated to establish a transparent and verifiable SMM price setting mechanism.
SMM Battery Grade Nickel Sulphate Price Index
The SMM Battery Grade Nickel Sulphate Price Index is assessed and reported based on the methodology defined in this document. As a benchmark, it can be referred to by battery grade nickel sulphate industry chain players (players engaging in raw materials, battery grade nickel sulphate, ternary cathode material precursor, ternary cathode material, etc.) as an indicator for their settlement price of battery grade nickel sulphate. The price index reflects the guide prices of battery grade nickel sulphate that are the most tradable at the time of publication on each full trading day. The price index is based on the actual transaction and bid/offer of spot battery grade nickel sulphate from the industry chain players (players engaging in raw materials, battery grade nickel sulphate, ternary cathode material precursor, ternary cathode material, etc.), and is calculated with different weights of each price submitter.
2. Introduction of price assessment
The SMM Battery Grade Nickel Sulphate Price Index reflects the most representative battery grade nickel sulphate prices for the day the index is published. The index is calculated as a weighted average by using the most tradable prices submitted by players across the battery grade nickel sulphate industry chain in China. This document specifies the methodology of SMM Battery Grade Nickel Sulphate Price Index calculation model in accordance with the IOSCO standard, as well as the process of collecting and treating sample transaction data, with the purpose of establishing an accurate, transparent and verifiable mechanism for SMM Battery Grade Nickel Sulphate Price Index assessing.
3. Process of data collection
SMM price analysts will collect battery grade nickel sulphate-related data information from submitters by means of phone, fax, email, QQ, WeChat and other forms of communication between 9:00 – 10:50 China Standard Time (“CST”) on every trading day. (Price data that are submitted after 10:50 CST will not be included in price assessment on the day, while data that does not contain the required minimum information details will not be included either, even if the data are submitted before the deadline)
The data will include traded prices within the day, and the most likely traded prices, bids and offers. All communication content on instant messengers, WeChat messaging and emails as well as face-to-face communication will be recorded, while phone communication via phone calls will also be recorded in summary and input into the database. Price data must be a typical, repeatable transaction between unaffiliated market participants (completely financially and legally independent).
SMM price analysts are subject to a code of business ethics when reporting to their supervisors the content of any coerced or threatened communication from market participants, or any kind of induced offer that seeks to influence the outcome of an assessment.
Price data provided by the submitters to SMM should include at least the following kinds of information. SMM analysts should encourage the price submitter to report as much detailed information as possible, not just the minimum requirements specified.
4. Formation of price index and treatment of outlier
SMM Battery Grade Nickel Sulphate Price Index is derived from a weighted average of the collected data after standardisation as well as each enterprise. The initial weight of each enterprise is calculated from the amount of nickel element participated in each trading segment of battery grade nickel sulphate chain (including raw materials, battery grade nickel sulphate, ternary cathode material precursor, ternary cathode material production, etc.) by that company.
SMM will keep tracking and reviewing the weightings of enterprises and industry segments, adjusting or maintaining the weightings based on changes in the market supply and demand as well as in consultation with submitters and market players. SMM will analyse the data information collected and the price index calculated on a daily basis after all the data information is collected and reserves the right to adjust the weights. The adjusted weights will be used to produce the final price index for that day. The regressed weights will be used as the initial weights for the next working day.
5. Assessment (calculation) of price index
The result obtained through prudent collection, standardization and weighed calculation will be published in the form of a price index during 10:50-11:00 CST on each trading day.
6. Price index publication
SMM will form the SMM Battery Grade Nickel Sulphate Price Index in accordance with the following standards and regulations and publish on the SMM websites at www.metal.com (English) or www.smm.cn (Chinese) during 10:50-11:00 CST on each working day, except for weekends and public holidays.
The time in between the deadline for price collection (10:50 CST) and the deadline for price publication (11:00 CST) daily is used to verify and calculate the final SMM Battery Grade Nickel Sulphate Price Index.
The time of the price publication may also be affected by emergencies and force majeure factors, such as power outages and natural disasters. In such cases, SMM will make every effort to inform the market of the delayed publication schedule as soon as possible.
6. Unit and form of existence
Form of targeted products of Battery Grade Nickel Sulphate Price Index: crystal;
Unit: RMB/mt in physical content;
Form of existence: in the form of a price index (rebounded to the single digit), tax included (13% VAT included);
Payment method: delivery to the factory, tax included; credit + bank acceptance (30-day credit + 6-month acceptance bill as standard, and other payment methods will be converted to this standard);
Online update: 11:00 a.m. CST on each trading day.
We welcome all relevant players in the industry chain to engage with and help SMM to better serve the enterprises in the battery grade nickel sulphate industry chain. Should you have any questions, please feel free to send your feedback to firstname.lastname@example.org.