PRICING NOTICE: Metal Bulletin launches daily fob China HRC, rebar indices
Metal Bulletin has launched daily export price indices for Chinese hot rolled coil and rebar out of China amid calls for more independent third-party references for the benchmarking of steel prices.
The Metal Bulletin fob China HRC Index and Metal Bulletin fob China Rebar Index, which went live on Monday October 16, are among the first of a number of carefully selected ferrous price assessments to be upgraded this year, and more are in the pipeline.
The daily indices seek to reflect daily transaction levels in China’s export market. To ensure that they capture the market as accurately as possible, actual transacted prices and tonnage will be accorded the highest weightage, in line with Metal Bulletin’s robust methodology; offers, bids and market participants’ estimates of where they think prices should be are assigned the minimum weightage.
Volatile prices for Chinese hot rolled coil coupled with a near-unstoppable upward trend in China in recent months have made it very challenging for exporters and market participants outside the country to make their pricing decisions.
Similarly, in the rebar segment, China’s strong domestic steel market had resulted in Chinese exporters being unable to provide buyers with too low a price.
Their inability to see eye to eye creates the need for transaction-based fob China indices – prepared by an impartial third party such as Metal Bulletin – to offer a standard number for each product that both sides could use as a reference.
Metal Bulletin’s index methodology is designed to accommodate periods of lower liquidity with a published list of fall-back measures that ensure consistency in any state of the market.
If you have any comments about the new indices or wish to find out more about ways of contributing to the price discovery process, please contact Metal Bulletin steel analysts Jessica Zong and Gladdy Chu or Asia steel editor Paul Lim. Questions relating to Metal Bulletin’s pricing methodology and policy can be directed to Metal Bulletin’s global steel editor, Andrew Wells.