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Metal Bulletin is continuing to examine the way it prices the ammonium paratungstate (APT) market in Europe and has now received some feedback on its initial consultation.
With the exception of one market participant, those who have responded have stated they do not wish to see the quotation removed or even suspended temporarily, as it is still used to set prices for concentrates contracts.
Furthermore, they have stated that they believe a concentrates quotation in Europe may be impractical because of the range of specifications required and also because most business is carried out on a long-term basis.
As it stands, the quotation in question continues to represent the European free market and is priced in dollars per metric tonne unit (mtu) on a cif Rotterdam, duty-free basis.
However, as market dynamics shift, Metal Bulletin has come to the conclusion that the parameters used for its European quotation and possibly its Chinese quotation will very likely have to change.
It is expected that APT will continue to be priced in dollars per mtu on a duty-free basis, but it has now been suggested that the European quotation could be altered to become an “ex-China” price.
It could therefore potentially include business for example from the USA, Israel and even South Korea, as well as any other geographical hubs outside China as per the market’s requirements.
Suggested ports so far include Baltimore and Cleveland, but Metal Bulletin is inviting suggestions for other ports, for which delivery terms and costs would be normalised.
We are also continuing to examine the possibility of including business for delivery up to three months (90 days) ahead, as it has been stated that there would be very little difference between a shipment price and a prompt price.
Some participants have also mooted the possibility that Metal Bulletin’s fob China APT price could be amended to become a domestic price, which may be priced in RMB.
Both the European and Chinese quotations already include blue tungsten oxide (BTO) and yellow tungsten oxide (YTO) prices, as it is generally understood that the premium they fetch is minimal. This is not expected to change.
These potential amendments are not mutually exclusive and nor do they depend on one another: it may be that all, some or none of them are applied. It may also be that other amendments are made, depending on further responses.
Metal Bulletin is now inviting a second round of feedback, including any new suggestions for ways to improve the APT quotation in both Europe and China to ensure it is as liquid and as accurate as possible, as well as responses on the practicality of the various proposals above.
Please send comments to reporter Claire Hack at the email address below by December 31, at which point we will reassess the feedback we have received and endeavour to reach a decision at the start of 2015.
Claire Hack chack@metalbulletin.com Twitter: @clairehack_mb
See also: Trade log November 2014: Ferro-tungsten and APT