【SMM Announcement】Announcement on the Addition of SMM Alumina Regional Index Prices

SMM News on March 31, 2025: Dear users, with the development of the aluminum industry, the alumina market is undergoing a series of changes. To adapt to these changes and further reduce transaction risks and costs in different segments of the alumina industry, SMM has continuously improved and deepened its research on alumina. After a period of market research and analysis, SMM plans to introduce the SMM Alumina Regional Index Price Point starting from April 7, 2025. Additionally, "SMM Alumina" will be renamed to "SMM Alumina Regional Index." SMM Price Assessment Methodology General Rules: Shanghai Metals Market (hereinafter referred to as SMM) is a completely independent third-party service organization that does not participate in any substantive transactions. Instead, it maintains close communication with buyers and sellers as a market observer or organizer, providing relevant services to the market. SMM continuously formulates, reviews, and revises its methodology through communication with industry professionals, adopting the most common product specifications, trade terms, and conditions in the industry, and equally valuing transactions that meet the standard specifications. SMM reserves the right to exclude any price information deemed unreliable or unrepresentative from its price assessments. SMM publishes daily metal spot prices (or indices, including the Chinese market, markets outside China, and global markets), commonly referred to as SMM prices. SMM has established corresponding methodologies for the SMM prices it publishes (which will be available for reference on SMM's official website www.smm.cn). These methodologies specify the methods and procedures for the generation and publication of SMM prices, which are strictly followed in the production and release of SMM prices. To align with the actual conditions of the spot market, SMM will make necessary revisions to the SMM price assessment methodology and announce them on the SMM official website before formal implementation. For any questions or suggestions regarding SMM prices and their methodology, please contact SMM customer service (contact information can be found on SMM's official website www.smm.cn). This document specifies the pricing mechanism for the SMM Alumina Regional Index Price. The purpose of establishing this standard by SMM is to create a transparent and verifiable SMM price-setting mechanism. Formation of the SMM Alumina Regional Index Price: Definition: The SMM Alumina Regional Index Price is an indicative price formed and published by SMM according to this methodology, which can be used as a reference for alumina settlement by the alumina industry chain (alumina refineries, traders, and aluminum smelters). This price reflects the most likely widely transacted guidance price for each full business day. The price is based on the actual transactions and indicative quotes of alumina on that day by the alumina industry chain (alumina refineries, traders, and aluminum smelters), and is calculated through a model with different weights assigned to each price submitter. Brief Introduction to the Formation Method: The SMM Alumina Regional Index Price reflects the most representative alumina price on the day the index is published. The index is calculated as a weighted average of the most likely transaction prices provided by enterprises at various stages of the alumina industry chain in different regions of China. This document, in accordance with IOSCO standards, clarifies the method for the calculation model of the SMM Alumina Index Price, the collection and processing of transaction sample data, and establishes an accurate, transparent, and verifiable mechanism for the reporting of the alumina index price. Method of Price Collection: SMM will, in accordance with the price submitter agreement, have price analysts regularly collect relevant data on battery-grade lithium hydroxide prices from the price collection contacts of price submitters via phone, QQ, WeChat, fax, and email. All instant messaging content, email communication, and any face-to-face communication records will be archived; details of phone communications will be summarized and entered into a database. The price data must be typical, repeatable transactions between non-affiliated market participants (financially and legally completely independent). SMM price analysts must adhere to the code of business ethics when reporting to their supervisors any communication content from market participants that is coerced or threatened, or any inducement offers that attempt to influence the assessment results. The price data provided by price submitters to SMM should include at least the following content. SMM price analysts should encourage price submitters to submit as many relevant details as possible, not just the minimum required: Alumina product standard: Alumina must meet the requirements for "alumina (AL2O3)" as specified in GB/T 24487-2022. Quotation unit: yuan/mt. Delivery location and method: Mainstream domestic trading locations. Buyer self-pickup, with transportation by truck or train. Payment method: Bank wire transfer, same-day settlement (based on the most mainstream settlement method in the market as surveyed by SMM, other payment methods are standardized to this standard). Derivation of the Price Index and Outlier Handling: The SMM Alumina Regional Index Price is derived by weighting the standardized data and the weights of each enterprise after standardizing the collected qualified data. The initial weights of each enterprise are calculated based on the enterprise's participation in alumina production equivalent. SMM regularly or irregularly reviews the weights of enterprises and the industry chain, adjusting or maintaining the weights based on changes in market supply and demand structure and after consulting with price submitters and the market. After collecting all prices each day, SMM analyzes the daily price collection and index results, retaining the right to adjust weights. The adjusted weights are then weighted with the data collected that day to obtain the final index for the day. The regressed weights will be used as the initial weights for the next business day. For enterprises whose quotes deviate significantly over the long term, in addition to the above-mentioned weight reduction measures, SMM will investigate to determine if there is any misleading behavior in the SMM Alumina Regional Index Price quotes. Once verified, the enterprise will be disqualified as a price submitter. Evaluation (Calculation) of the Published Index: Between 10:45 and 11:00 each trading day, the price derived from the complete collection, standardization, and weighted calculation is published in the form of an index. Price Publication: SMM will form the SMM Alumina Regional Index Price according to the following standards and regulations and publish it on the SMM official website www.smm.cn. The publication time is between 11:00 and 11:15 each business morning (excluding Chinese legal holidays and weekends). The deadline for price collection, which is the 15 minutes between 10:45 and the publication time at 11:00, is used to verify data and evaluate the final published alumina index price. The publication time may also be affected by various emergencies and force majeure factors, such as power outages and natural disasters. If this occurs, SMM will make every effort to inform the market of the delayed publication time as early as possible. Pricing Unit and Presentation: Price (Product) Standard: Alumina must meet the requirements for "alumina (AL2O3)" as specified in GB/T 24487-2022. Payment Method: Bank wire transfer, same-day settlement. Delivery Locations: Shanxi, Henan, Shandong, Guangxi, Guizhou. Delivery Method: Buyer self-pickup. Pricing Unit: yuan/mt. Presentation: Presented in index form (retaining two decimal places), including tax (currently including 13% VAT). Online Update Time: Each trading day from 11:00 to 11:15. We welcome more relevant enterprises in the industry chain to participate and support SMM in better serving alumina-related enterprises. For any questions, please feel free to contact Mingxin Guo at guomingxin@smm.cn; Xiaolei Liu at frankliu@smm.cn; Shaoxue Yu at yushaoxue@smm.cn; Cong Wang at wangcong@smm.cn. Shanghai Metals Market Aluminum Department