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It will be calculated weekly on Fridays and follow the same calendar as the Metal Bulletin Ferro-chrome Index.
The new price indicates a representative level for the European ferro-chrome benchmark if it were to be settled on that Friday.
It does so by using a proprietary Metal Bulletin formula based on the historical relationship between the European ferro-chrome benchmark and Metal Bulletin market data.
Historically this formula has given a very accurate guide to the benchmark price.
“The quarterly ferro-chrome benchmark still plays a huge role in the market, regardless of the questions that exist about its relationship with realised prices as a result of the discounts that have in the past been granted to buyers,” Metal Bulletin’s editorial director Alex Harrison said.
“Metal Bulletin’s indicator will be watched closely in the market, particularly as the time for settlement approaches, because it captures the relationship between the spot prices that our price reporters and analysts cover and the likely settlement price.”
Amy Bennett, principal consultant at Metal Bulletin Research, said: “Metal Bulletin’s European ferro-chrome benchmark indicator is a critical new resource for the ferro-alloys industry. We have seen extreme volatility in chrome pricing over the past two years, and the ferro-chrome indicator will be a significant asset to the industry. Metal Bulletin’s experience in creating robust indexes for the mining and metals markets was good preparation for the launch of this indicator.”
The European Ferro-chrome Benchmark Indicator was trialled at the end of 2016, ahead of the first-quarter settlement, and was seen by market participants then as a useful tool that acted as an independent guide to a fair level for the quarterly benchmark based on prevailing spot market conditions.
The new price adds to the suite of assessed and index prices, and other services, that the Metal Bulletin Group provides for the chrome market, including producers, traders, stainless steel mills and foundries.
The specification for the assessment is as follows: Description: European Ferro-chrome Quarterly Benchmark Indicator Type: Ferro-chrome lumpy, basis 52% Chrome content Price: $ per lb of Chrome content to major European destinations Cr: 52% Chrome content
To find out more about the Ferro-chrome Benchmark Indicator, please contact index analyst Inaki Villanueva (ivillanueva@metalbulletin.com)