PRICING NOTICE: Proposal to amend copper concentrate TC/RC index methodology

Fastmarkets proposes to revise the outlier detection method used in the calculation of its copper concentrate treatment and refining charge (TC/RC) index to reflect timely changes of an increasingly active spot market.

The prices involved are: 

Currently, the Fastmarkets copper concentrates index has applied an automatic filter to exclude outlier data to prevent a single data point overbearing influence on the final index.

All normalized data points that fall greater than 10% away from an initial calculation of the index are excluded – the index is then recalculated.

Editorial judgement is also deployed to determine whether a specific data point is a representation of market sentiment for the week, and therefore its inclusion or exclusion in the index calculation.

Proposed change
At a time of rapid changes in the spot concentrate market, the growing variance of data points collected has given rise to a need to adjust our outlier detection model.

Fastmarkets proposes to apply a ±1.96 standard deviation filter which should exclude around 5% of the normalized data points. Data point deviation from the index follows a normal distribution of which 95% lies within 1.96 standard deviations away from the index.

The larger the standard deviation is, the larger the outlier filter will be.

The absolute standard deviation value is updated every two weeks to reflect the latest trajectory of the spot market activity.

The consultation period for this proposed amendment starts on Wednesday April 28 and will end on Friday May 28. The amendment will then take effect, subject to market feedback, from Friday June 4.

To provide feedback on the proposed change, or if you would like to provide price information by becoming a data submitter to this index, please contact Julian Luk by email at: pricing@fastmarkets.com. Please add the subject heading ‘FAO: Julian Luk re: copper concentrate index.’

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

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