Launch of Shanghai Nonferrous Metals Index

Archiv – The Shanghai Nonferrous Metals Trade Association (SNMTA) has unveiled the Shanghai Nonferrous Metals Index (SMMI) as a means of reflecting the fundamentals within the non-ferrous metals industry and of providing industrial participants with price trend guidance.China | The Shanghai Nonferrous Metals Trade Association (SNMTA) has unveiled the Shanghai Nonferrous Metals Index (SMMI) as a means of reflecting the fundamentals within the non-ferrous metals industry and of providing industrial participants with price trend guidance.
The index covers spot prices for six non-ferrous metals – copper, aluminium, nickel, lead, zinc and tin – which together account for 90% of China’s non-ferrous metals output. The reference level of 1000 is based on the spot price quoted on April 1 2003. The weighting for each non-ferrous metal has been set in accordance with its market share according to figures provided by the State Statistics Bureau and China Customs (copper 36.9%, aluminium 32.9%, nickel 4.7%, lead 14%, zinc 2.2% and tin 9.3%). According to the SNMTA, weightings will be adjusted every two years to reflect industry developments.
A total of 105 enterprises – ranging from producers of non-ferrous metals to the companies trading in them – have been selected to provide pricing references. These companies include 12 listed companies in the non-ferrous metals industry such as Chalco, Jiangxi Copper and Yunan Copper.
The composite spot index for the six metals is to be published at noon every weekday and is expected to be closely monitored by buyers and sellers. According to the SNMTA, the index reveals not only the price trends for each metal but also takes account of the interactions between different markets.
Establishment of the composite index should also provide the Chinese government with a simplified approach to monitoring the industry and enable it to draft appropriate regulatory policies.