With the gradual increase of Indonesian NPI participation in the NPI trading market, the proportion of Indonesian NPI in the Chinese market is also continuously increasing. To adapt to market changes, after a period of sedimentation and market research, SMM plans to add the Indonesian NPI FOB index starting from December 1, 2023.
Formation of the SMM Indonesia NPI FOB Index:
1. Definition: The SMM Indonesian NPI FOB Index is an indicative index price formed and published by SMM based on this methodology, which can serve as a reference for Indonesian NPI FOB price settlement. This price reflects the NPI FOB price that is most likely to be traded at major ports in Indonesia every full working week.
2. Introduction to Formation Method: This document clarifies the method for calculating the Indonesian NPI FOB index of Shanghai Metals Market based on the IOSCO standard, as well as the process of collecting and processing transaction sample data. It also establishes an accurate, transparent, and verifiable mechanism for reporting the Indonesian NPI FOB index. During the trial operation of this index, based on the actual NPI CIF spot transactions and buying and selling prices of ports in China and other Indonesian exporting countries (such as India, South Korea, etc.), it is calculated by subtracting the shipping costs from Indonesia to each country on that day and adding weight to the export volume of Indonesia to each country. However, currently, Indonesia's NPI exports are mainly in the Chinese market, while the trading volume in other markets is relatively low. Currently, the reference price for this price index mainly comes from the Chinese market. If the volume of subsequent exports to other countries increases, the export weight will be adjusted accordingly.
3. The method of price collection: SMM will be based on the agreement of price submitters, and price analysts will use phone, QQ(Chinese really-time communication application, similar with Wechat), WeChat Collect relevant data information on Indonesian NPI FOB (to China) prices regularly (between 9:00 am and 11:20 am on every Friday) through fax and email from the procurement contacts of the procurement units and non-procurement units that meet the procurement standards (Price data submitted beyond 11:20 will not be used as a basis for price evaluation on that day, and incomplete data that does not include the required minimum information details will not be included even if submitted before the deadline.). The price data information can include the prices already traded on that day, the most likely expected pending prices, quotations, and inquiries. All instant messaging content, email communication content, and any face-to-face communication records will be archived; The details of telephone communication will be summarized and recorded in the database. The price data information must be a typical and reproducible transaction between nonaffiliated market participants (financially and legally completely independent). SMM price analysts must comply with the Code of Business Ethics when reporting to their supervisors any forced or threatened communication from market participants, or any induced offer that attempts to influence the evaluation results. The price data information provided by standard or non-standard units to SMM should at least include the following content. SMM's price analysts should encourage standard or non-standard units to submit as much detailed information as possible, rather than just the prescribed minimum requirements.
4. Assessment (calculation) of published prices
At CST 11:20-11:30 every Friday, the price obtained after the above-mentioned complete collection, standardization, and weighted calculation will be released in the form of an index.
5. Price Release: SMM will refer to the following standards and regulations to form the Indonesian NPI FOB index, which will be publicly published on SMM's official website www.smm.cn. The release time is from 11:20 am to 11:30 am (Beijing Time) every Friday (excluding Chinese statutory holidays and weekends). The deadline for pricing, which is the 10 minute period from 11:20 am to 11:30 am (Beijing Time) at the latest deadline for publication, is used to validate data and evaluate the final published Indonesian NPI FOB index. The release time may also be affected by various emergency situations and force majeure factors, such as power outages and natural disasters. If this situation occurs, SMM will make every effort to publicly inform the market of the delayed price release time as soon as possible.
6. Pricing Unit and Manifestation
Grade: NPI nickel content is 10-16%
Quotation unit: USD/nickel point
Manifestation: Exponential (Exponential to individual digits) form presentation online
Online update time: Every Friday (except Indonesian public holidays) at 11:30 am Beijing time (10:30 Jakarta time, Indonesia).
Written by SMM Nickel Research, if you have any questions about the nickel market, please don't hesitate to talk with me Fancyli@smm.cn
