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The price will be tonnage-weighted and will only consider deals. It will be updated on a daily basis through the course of each calendar month before resetting. That is, each day any new deals will be added to the pool of data on which the price is based.
At the close of each month, it will therefore give the average tonnage-weighted price at which HMS 1&2 (80:20 mix) steel scrap was traded during that month in the Turkish import market.
The new price is designed to complement Fastmarkets’ daily index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey.
The existing daily index is designed to reflect the prevailing market level on each day, tonnage weighted for deals but also using bids, offers and estimates from market participants.
The proposed month-to-date deal-weighted average price, on the other hand, is designed to reflect the price of traded material only, over the course of a given month. The tonnage weighting will be continuously applied and updated throughout the month, thereby giving a true tonnage-weighted average price at the close of each month.
This will give a different price than simply taking an average of all the daily index values in a given month. The latter would give equal weight to all daily values regardless of the traded tonnages underpinning them.
The month-to-date deal weighted average price will only be updated when deals occur. So if no deals are heard on a given day, the price will be rolled over.
The month-to-date deal weighted average will be reset at the start of each month. If no deals are heard at the start of a given month, the previous month’s closing price will be published each day until deals are heard, from which point only the deals heard in the current month will be used.
Fastmarkets will continue to describe what deals have taken place each day in the Daily Steel Scrap market reports, published on metalbulletin.com and the Fastmarkets Dashboard.
As with the daily index, material of different grades that falls within the target specification range will be normalized to the index base specification. Data will be normalized to the base specification using models developed in-house and based on regression analysis of the collected data points.
The analysis allows Fastmarkets to capture the value-in-use applied by the market to different materials, and normalize them to a single specification. The normalization coefficients for the indices are updated every month to reflect the constantly changing value-in-use relationship of different origins and grades.
The proposed specifications are as follows:
Quality: HMS 1&2 (80:20 mix compliant with ISRI specifications 200-206; grades normalized – Shredded, HMS 1&2 (70:30), HMS 1&2 (90:10), HMS 1, Bonus Grade, P&S, A3 material) Quantity: Minimum 5,000 tonnes Location: cfr Iskenderun, Turkey Timing: Within six weeks Unit: USD per tonne Payment Terms: Cash, other payment terms normalized to basis Publication: Daily, 4pm London time Notes: Bulk carrier from Northern Europe.
The consultation period for this proposed launch starts on June 29 and will end on July 29. The launch of the new assessment, subject to market feedback, will be on August 2.
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 Ross Yeo by email at pricing@fastmarkets.com. Please add the subject heading ‘FAO: Ross Yeo, re: Turkey steel scrap month-to-date deal-weighted average.’
To see all Fastmarkets’ pricing methodology and specification documents, go to https://www.fastmarkets.com/about-us/methodology.
For answers to likely frequently asked questions about this proposed price, see the related article via this link.