Conclusion of consultation on proposed changes to low-carbon FeCr pricing in Europe

Fastmarkets invited feedback from the industry on the pricing methodology for low-carbon ferro-chrome in Europe, via an open consultation process, initially between November 28, 2022, and January 9, 2023, and then extended to February 6, 2023.

After the end of the original consultation period on January 9, responses from the market suggested that there would be a degree of support for the three changes under consultation, which were:
• The possible introduction of a new price covering low-carbon ferro-chrome with lower chrome content
• Adjusting the specification of the fortnightly price assessment for ferro-chrome 0.10% C, average 65-70% Cr, delivered Europe, to reflect more commonly requested impurity levels
• Discontinuing the fortnightly price assessment for ferro-chrome, low carbon, 65% Cr, max 0.06% C, delivered Europe.

Fastmarkets then chose to seek further feedback on these proposals, with a view to gaining clearer insight into any material changes needed.

After the conclusion of the extended consultation period, Fastmarkets has now made the following decisions:

New 0.1% carbon quotation proposal
Fastmarkets will introduce an assessed price range for ferro-chrome with 0.1% carbon content and chrome content of less than 65%, otherwise using the same methodology as the existing quotation. This will be on a trial basis starting from Tuesday February 28, for a period of eight weeks, ending on Tuesday April 25.

The trial specification and other terms will be:

Ferro-chrome low carbon, 0.10% C, basis 58-64.9% Cr, CIF Europe, $ per lb Cr
Quality: Lump, Cr 58-64.9%, C 0.10%, Si 1.5% max, P 0.03% max, S 0.03% max
Quantity: Min 25 tonnes
Location: CIF Europe
Unit: USD per lb of chrome contained
Payment terms: 30 days, other payment terms normalized
Publication: Fortnightly, Tuesday, 2-3pm London time.

During the trial period, Fastmarkets will gather data on this price, but it will not publish a price assessment. After the end of the trial, a decision will be made on whether to launch the price formally, based on whether sufficient data can be gathered on a fortnightly basis.

Depending on the data gathered, Fastmarkets may also choose to adjust the chrome content to a narrower range of 60-64.9%. This will be advised ahead of any formal launch.

Proposed changes to impurity levels in existing 0.1% carbon quotation
Most respondents to the consultation were either in favor of, or had no strong opinion on, reducing the maximum tolerances for sulfur and phosphorus to 0.03% from 0.05%.

Fastmarkets will therefore make these adjustments, as highlighted below in italics:

MB-FEC-0003 Ferro-chrome, 0.10% C, average 65-70% Cr, delivered Europe, $ per lb Cr
Quality: Lump, Cr 65% basis (range 65-70% Cr), C 0.10% excluding material up to 0.06% C, Si 1.5% max, P 0.03% max, S 0.03% max
Quantity: Min 25 tonnes
Location: Delivered consumer works Europe
Unit: USD per lb of chrome contained
Payment terms: 30 days, other payment terms normalized
Publication: Fortnightly, Tuesday 2-3pm London time.

If it should be the case, as suggested by one respondent, that this has the effect of reducing the liquidity of the price, Fastmarkets will re-examine this change at a later date.

Proposed discontinuation of ferro-chrome low carbon, 65% Cr, max 0.06% C, delivered Europe price
Finally, Fastmarkets has received feedback suggesting it should not discontinue the publication of an assessed price for low carbon ferro-chrome with 0.06% carbon content.

It will therefore continue to publish this quotation using the specifications below:

MB-FEC-0002 Ferro-chrome low carbon, 65% Cr, max 0.06% C, delivered Europe, $ per lb Cr
Quality: Lump, Cr 65% basis (range 60-70% Cr), C 0.06% max, Si 1.5% max, P 0.05% max, S 0.05% max
Quantity: Min 25 tonnes
Location: Delivered consumer works Europe
Unit: USD per lb of chrome contained
Payment terms: 30 days, other payment terms normalized
Publication: Fortnightly, Tuesday, between 2pm and 3pm London time.

There was a suggestion during the consultation that the maximum phosphorus and sulfur tolerances for this price should also be reduced to 0.03%. This will now be explored further.

Full details of the original consultation are available on the Fastmarkets Dashboard.

The consultation sought to ensure that our methodologies continue to reflect the physical market under indexation, in compliance with the International Organization of Securities Commissions (IOSCO) principles for Price Reporting Agencies (PRAs). This includes all elements of our pricing process, our price specifications and publication frequency.

To see all Fastmarkets’ pricing methodology and specification documents, go to: https://www.fastmarkets.com/methodology.

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Fastmarkets FOEX would like to thank for the feedback received during the consultation period. It was fully supportive to our current methodology. To summarize, this open consultation does not lead to material changes in the current methodology. A newly dated methodology document will be soon posted.
No feedback was received during the consultation period and therefore no changes will be made to the methodologies at this stage. This consultation, sought to ensure that our methodologies continue to reflect the physical market under indexation, in compliance with the International Organization of Securities Commissions (IOSCO) principles for Price Reporting Agencies (PRAs). This includes […]