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Fastmarkets has considered all data points within the existing low-carbon ferro-chrome price with a carbon and chromium content of 0.10% and 60-70% respectively.
Some market participants felt that a divergence in the spread that had developed between the high and low end of the price range had resulted in the price becoming less representative.
A clear relationship was drawn between chromium content and price. In addition, market fundamentals suggest products with different chromium content should be treated separately. Although, it should be pointed out that this perspective was not shared by all respondents.
Initially, Fastmarkets proposed to split the existing price into lower and higher chromium content products, specifically 60-64.9% and 65-70%, and initially invited feedback in a pricing notice on July 5. Consultation into this proposal was extended for a further month on August 6.
Feedback from this market consultation showed support for the pricing of higher chromium content (65-70% Cr), which is also more liquid. Yet, there was little support for a low chromium price (60-64.9% Cr) and evidence was not forthcoming that there would be sufficient liquidity to support this price.
In response, Fastmarkets plans to offer only the higher chromium content price.
Market feedback suggests a price with a 65-70% Cr content could be offered without considerable loss of liquidity. Use of the narrower range of chromium would more clearly define what product has been priced.
In addition, it would make the price more focused on trades because it would rule out data points for the relatively illiquid lower Cr material, which tend to be bids or assessments. Analysis has shown that reported trades are much more likely to be related to the higher than lower Cr material.
All historical data relating to this price prior to the amendment will remain available in the pricing section of the Fastmarkets website.
There will be no changes to the publishing time and dates of the proposed assessments.
The full specification for the proposed new 0.10% C low-carbon ferro-chrome price is as follows:
Description: Low-carbon ferro-chrome (0.10% C avg 65-70% Cr) delivered consumer works Europe $/lb Cr Type: Assessed range Basis: Delivered consumer works Europe Currency: USD Unit: lb of chrome contained Min lot size: 25 tonnes Payment terms: 30 days, other payment terms normalized Quality: Cr: 65% basis (range 65-70% Cr); C: 0.10% excluding material up to 0.06% C; Si: 1.5% max; P: 0.05% max; S: 0.05% max Form: Lump Publication: Fortnightly. Friday between 2pm and 3pm London time
Following the closing of the consultation period for this proposed amendment on October 4, changes will take place from October 5.
To provide feedback on this price or if you would like to provide price information by becoming a data submitter to this price, please contact Jon Stibbs by email at: pricing@fastmarkets.com. Please add the subject heading “FAO: Jon Stibbs, re: Low-carbon ferro-chrome (0.10%)”
To see all Fastmarkets pricing methodology and specification documents, click here.