CRU Steel. Methodology and Price Definitions Guide. April 2014

Transcription

1 April 2014 Methodology and Price Definitions Guide CRU Steel Price assessment methodology overview 2 European domestic market prices 3 US domestic market prices 3 Chinese domestic market prices 4 Chinese export market prices 5 Asian import prices (non CIS) 5 Asian import prices (CIS) 6 CIS export prices (FOB Black Sea port) 6 Brazilian export prices 7 Brazilian domestic prices 7 Indian domestic 7 Steelmaking raw materials 8 Silicon metal 9 Ferrosilicon 9 LONDON BEIJING MUMBAI SANTIAGO SYDNEY PITTSBURGH SAO PAULO

2 CRU Steel: Benchmark Price Assessment Methodology The use of independent assessments of prices has increased dramatically in recent years. Traditionally such price assessments have been used by physical buyers and sellers as a means to benchmark their recent transactions. Whilst in some instances they are still mostly used in this way, price assessments are now increasingly being used by both the steel industry, and financial market participants in other ways. The use of independent assessments of prices has grown since 2004, particularly in the case of finished steel, reflecting the significant increase that has been observed in steel price volatility. In some markets, independent assessments of prices are now being entered into variable cost contracts ; used as the trigger points for surcharges; they are being used in the physical contracts between steel mills/service centres and their customers; and in futures contracts, such as CME s US Midwest Domestic Hot-Rolled Coil Futures Steel Contract. The CRU approach to developing steel price assessments CRU has a policy of developing its assessments of steel industry prices, both raw material and finished steel, in tandem with how they are being used by both the physical and financial communities and also with the type of price data available. This evolutionary process has so far resulted in three families of CRU price assessments. Level 1.0 price assessments Currently, the majority of CRU s price assessments are classified as Level 1.0 price assessments. The main features of CRU s Level 1.0 price assessments are the following: Data providers submit a single price, representing the average that orders have been placed at within the defined survey period usually the previous week of business (see definitions later on). Data providers share their data submissions during telephone surveys with CRU Steel Team analysts. CRU Steel Team analysts attach a weighting to each price submission to arrive at final price assessments. Price data is collected and assessments are published on a once per week or once per month basis. Level 1.5 price indices CRU s Level 1.5 price indices include those which are starting to be used in physical contracts, and some financial contracts that may exist. For these assessments, the data collection/calculation procedures have been enhanced: Data providers are required to sign a data providers agreement Data providers submit data electronically via the CRU Price Collection Platform (CPCP) our online price collection tool, rather than by telephone survey. Data providers submit an average weighted price for their spot transactions placed in the preceding week for forward delivery Data is collected - and indices published on a weekly basis. Level 2.0 price indices CRU s Level 2.0 price indices include those which are already used extensively in physical contracts, and any financial contracts that may exist. For these indices, the data collection/calculation procedures have been enhanced still further: Data providers are required to sign a data providers agreement which gives CRU the right to verify data submissions. Data providers submit data electronically via the CRU Price Collection Platform (CPCP) our online price collection tool, rather than by telephone survey. In addition to price data, data providers also provide volume data, which is equal to the volume of orders to which the price submission refers. Data is collected - and indices published on a weekly basis. CRU is currently providing four Level 2.0 price indices for hotrolled coil, cold-rolled coil, hot-dipped galvanised coil and plate for the US Midwest market. Operations manuals More detailed information outlining the methodology behind CRU s different levels of price assessments can be found in the Operations Manuals for each price assessment level. Become a data provider For information on how to become a data provider for Level 2.0 price indices and the subsequent benefits you will enjoy, please visit Summary CRU maintains a policy to report accurate price assessments, regardless of the procedures employed. The evolutionary development approach allows CRU to work with market participants at different levels of data transparency to provide accurate and timely price information. In line with CRU s stated policy, each of its assessments of steel prices, regardless of at what stage they are currently at, will continue to evolve in tandem with how they are being used by both the physical and financial communities. Last edit: 4 April 2014 CRU is currently providing eight Level 1.5 price assessments for hot-rolled coil, cold-rolled coil, hot-dipped galvanised coil and plate in Germany and Italy. 2

3 EUROPEAN DOMESTIC MARKET PRICES Semi-finished and finished steel prices are based on a CRU survey of industry participants. The price refers to purchases for forward delivery, according to lead-time, which will vary. Hot rolled coil Base price, from parity point, for commercial quality (prime) hot-rolled coil within standard tolerances. For medium sized buyers, in coils of at least 15 tonnes each, with standard packaging. Extras for gauge and width are excluded. Delivery charges and taxes are Base price, from parity point, for commercial quality (prime, annealed and tempered) cold-rolled coil within standard tolerances. For medium sized buyers, in coils of at least 15 tonnes each, with standard packaging. Extras for gauge and width are excluded. Delivery charges and taxes are excluded. Raw materials Base price, from parity point, for commercial quality hotdipped galvanised coil within standard tolerances and with specifically a pure zinc coating of 275g/m2 and a normal surface finish. For medium sized buyers, in coils of at least 15 tonnes each, with standard packaging. Extras for gauge and width are excluded. Delivery charges and taxes are excluded. Raw materials Plate Delivered price for commercial quality plate. All extras for gauge, width and length are excluded. For medium sized buyers, with standard packaging. Delivery charges to domestic market customers are included but taxes are excluded. Raw materials surcharges (where applicable) Delivered price for commercial quality 12mm diameter reinforcing bar within standard tolerances. For medium sized buyers, in standard lengths and with standard packaging. Taxes are excluded. Raw materials Delivered price for commercial quality equal angles of 50mm, within standard tolerances. For medium sized buyers, in standard lengths and with standard packaging. Taxes are excluded. Raw materials Delivered price for commercial quality HEB mm sections within standard tolerances. For medium sized buyers, in standard lengths and with standard packaging. Taxes are excluded. Raw materials Delivered price for mesh quality wire rod with a carbon content below 0.23%. For medium sized buyers, in standard lengths and with standard packaging. Taxes are excluded. Raw materials surcharges (where applicable) US DOMESTIC MARKET PRICES Base price, FOB mill East of the Rockies, for commercial quality (prime) hot-rolled coil within standard tolerances. For medium sized buyers, in coils of at least 40,000lbs each, with standard packaging. Extras for gauge and width are excluded. Delivery charges and taxes are Base price, FOB mill East of the Rockies, for commercial quality (prime, annealed and tempered) cold-rolled coil within standard tolerances. For medium sized buyers, in coils of at least 20,000lbs each, with standard packaging. Extras for gauge and width are excluded. Delivery charges and taxes are excluded. Raw materials Base price, FOB mill East of the Rockies, for commercial quality hot-dipped galvanised coil within standard tolerances, with a gauge of 0.06, a pure zinc coating of 0.90oz/ft2 and a normal surface finish. For medium sized buyers, in coils of at least 20,000lbs each, with standard packaging. Extras for gauge and width are excluded. Delivery charges and taxes are excluded. Raw materials surcharges (where applicable) are included. Electro-galvanised coil Base price, FOB mill East of the Rockies, for commercial quality electro-galvanised coil within standard tolerances, with a gauge of , a pure zinc coating of 0.50oz/ft2 and a normal surface finish. For medium sized buyers, in coils of at least 20,000lbs each, with standard packaging. Extras for gauge and 3

4 width are excluded. Delivery charges and taxes are Plate Price, FOB mill East of the Rockies, for ASTM A36 commercial quality plate, in thickness between 3/8 of an inch and 2 inches, width between 72 and 120 inches and length between approximately 240 and 720 inches. Any further extras for gauge, width and length are excluded. For medium sized buyers, with standard packaging. Delivery charges and taxes are excluded. Raw materials Price, FOB mill East of the Rockies, for grade 60, ½ diameter reinforcing bar within standard tolerances. For medium sized buyers, in standard mill lengths. Delivery charges and taxes excluded. Raw materials surcharges (where applicable) Price, FOB mill East of the Rockies, for 2x2x¼ equal angle within standard tolerances. For medium sized buyers, in standard mill lengths. Delivery charges and taxes excluded. Raw materials surcharges (where applicable) Price, FOB mill East of the Rockies, for commercial quality 8 sections within standard tolerances. For medium sized buyers, in lengths between 30 and 80 inclusive. Delivery charges and taxes excluded. Raw materials Price quoted is FOB mill East of the Rockies, for mesh quality wire rod with a carbon content below 0.23%. For medium sized buyers. Delivery charges and taxes CHINESE DOMESTIC MARKET PRICES (Q235) hot-rolled coil, 3mm gauge x 1,500mm wide, within standard tolerances. 17% VAT is included, but delivery is excluded. Raw materials surcharges (where applicable) (ST12) cold-rolled coil, 1mm gauge x 1,250mm wide, within standard tolerances. 17% VAT is included, but delivery is excluded. Raw materials surcharges (where applicable) Price quoted is ex-warehouse Shanghai, for commercial quality (ST02) hot-dipped galvanised coil, 1mm gauge x 1,250mm wide, within standard tolerances. 17% VAT is included, but delivery is excluded. Raw materials Plate (Q235A) plate, 20mm thickness within standard tolerances. 17% VAT is included, but delivery is Price, ex-warehouse Tangshan, for commercial quality (HRB 335), mm square billet, within standard tolerances. 17% VAT is included, but delivery is Rebar Price quoted is ex-warehouse Shanghai, for commercial quality (HRB 335), 14mm diameter debar, within standard tolerances. 17% VAT is included, but delivery is (Q235), 50mm angle within standard tolerances. 17% VAT is included but delivery is excluded. Raw materials (Q235), 400mm sections, within standard tolerances. 17% VAT is included but delivery is excluded. Raw materials (Q235), 6.5mm diameter wire rod for construction use, within standard tolerances. 17% VAT is included, but delivery is excluded. Raw materials surcharges (where applicable) 4

5 CHINESE EXPORT PRICES Price, FOB the port of export (Eastern China), for commercial quality (HRB 335), mm square billets, within standard tolerances. VAT, VAT rebates and export taxes are taken into account where necessary. Raw materials surcharges (where applicable) Price, FOB the port of export (Eastern China), for commercial quality (HRB 335), 14mm diameter debar, within standard tolerances. VAT, VAT rebates and export taxes are taken into account where necessary. Raw materials surcharges (where applicable) are included. Price, FOB the port of export (Eastern China), for commercial quality (Q235), 400mm sections, within standard tolerances. VAT, VAT rebates and export taxes are taken into account where necessary. Raw materials Price, FOB the port of export (Eastern China), for commercial quality (Q235), 6.5mm diameter wire rod for construction use, within standard tolerances. 1 VAT, VAT rebates and export taxes are taken into account where necessary. Raw materials surcharges (where applicable) Slab ASIAN IMPORT PRICES (NON CIS ORIGIN MATERIAL Base price, CFR Far East port, for commercial quality slab. Import duties/tariffs, traders commissions, local materials Base price, CFR Far East port, for commercial quality hot-rolled coil within standard tolerances. Extras for gauge and width are excluded. Import duties/tariffs, (where applicable) Base price, CFR Far East port, for commercial quality cold-rolled coil within standard tolerances. Extras for gauge and width are excluded. Import duties/tariffs, charges are excluded. Base price, CFR Far East port, for commercial quality hot-dipped galvanised coil within standard tolerances and with a pure zinc coating of 275g/m2 (or equivalent) and a normal surface finish. Import duties/tariffs, traders commissions, local taxes and inland delivery charges are Plate Price, CFR Far East port, for ASTM A36 commercial quality plate, or equivalent quality, in thicknesses between 10mm and 40mm. Any further dimension extras are excluded. Import duties/tariffs, traders commissions, local taxes and inland delivery charges are also excluded. Raw materials surcharges (where applicable) Price, CFR Far East port, for commercial quality billet within standard tolerances. Import duties/tariffs, traders commissions, local taxes and inland delivery charges are Price, CFR Far East port, for commercial quality 12mm diameter reinforcing bar (or equivalent), within standard tolerances and in standard lengths. Import duties/tariffs, (where applicable) Price, CFR Far East port, for commercial quality 50mm equal angles, within standard tolerances and in standard lengths. Import duties/tariffs, traders commissions, local materials (metric size) Price, CFR Far East port, for commercial quality metric size sections, within standard tolerances and in standard lengths. Import duties/tariffs, traders commissions, local materials 5

6 (imperial size) Price, CFR Far East port, for commercial quality 8 wide-flange, within standard tolerances and in standard lengths. Import duties/tariffs, traders commissions, local taxes and inland delivery charges are Price, CFR Far East port, for mesh quality wire rod with a carbon content below 0.23%, within standard tolerances. Import duties/tariffs, traders commissions, local taxes and inland delivery charges are excluded. Raw materials surcharges (where applicable) are included. Price, CFR Far East port, for commercial quality 50mm equal angles, within standard tolerances and in standard lengths. Import duties/tariffs, traders commissions, local materials Price, CFR Far East port, for commercial quality metric size sections, within standard tolerances and in standard lengths. Import duties/tariffs, traders commissions, local materials ASIAN IMPORT PRICES (CIS ORIGIN MATERIAL Base price, CFR Far East port, for CIS-origin commercial quality hot-rolled coil within standard tolerances. Extras for gauge and width are excluded. Import duties/tariffs, (where applicable) Base price, CFR Far East port, for CIS-origin commercial quality cold-rolled coil within standard tolerances. Extras for gauge and width are excluded. Import duties/tariffs, (where applicable) Price, CFR Far East port, for CIS-origin 3SPPS billet within standard tolerances. Import duties/tariffs, traders commissions, local taxes and inland delivery charges are Price, CFR Far East port, for commercial quality 12mm diameter reinforcing bar (or equivalent), within standard tolerances and in standard lengths. Import duties/tariffs, (where applicable) Price, CFR Far East port, for mesh quality wire rod with a carbon content below 0.23%, within standard tolerances. Import duties/tariffs, traders commissions, local taxes and inland delivery charges are excluded. Raw materials surcharges (where applicable) are included. Slab CIS EXPORT PRICES (FOB BLACK SEA PORT) Price, FOB Black Sea port, for CIS-origin SA1006 slab. Semi-finished and finished steel prices are based on a CRU survey of industry participants. The price refers to purchases for forward delivery, according to lead-time, which will vary. Price, FOB Black Sea port, for CIS-origin commercial quality hot-rolled coil within standard tolerances. Price, FOB Black Sea port, for CIS-origin commercial quality cold-rolled coil within standard tolerances. Price, FOB Black Sea port, for CIS-origin 3SPPS billet. 6

7 Price, FOB Black Sea port, for commercial quality debar. Price quoted is FOB Black Sea port, for CIS-origin equal angles. Traders commissions are excluded. Raw materials Price, FOB Black Sea port, for CIS-origin mesh quality wire rod. Traders commissions are excluded. Raw materials Slab BRAZILIAN EXPORT PRICES Price, FOB Latin American port, for commercial quality slab. Traders commissions are excluded. Raw materials Price, FOB Latin American port, for commercial quality billet. Traders commissions are excluded. Raw materials BRAZILIAN DOMESTIC PRICES Price, ex-warehouse Southeast Brazil, for commercial quality (prime) material, within standard tolerances. Extras for gauge and width excluded. Delivery charges and taxes excluded. Raw materials surcharges (where applicable) INDIAN DOMESTIC PRICES Base price, delivered (Mumbai/Delhi, from the mill) (1), for commercial quality (prime) hot-rolled coil, within standard tolerances. Extras for gauge and width are excluded, as are all excise duties/sales taxes, except the Central Sales Tax, which is included (where applicable). Raw materials surcharges are included (where applicable). The price reported refers to spot orders and is based on a CRU survey of industry participants. Note: (1) Alternatively, FOB mill owned service centre/ retail outlet within these areas. Base price, delivered (Mumbai/Delhi, from the mill)(1), for commercial quality (prime, annealed and tempered) cold-rolled coil, within standard tolerances. Extras for gauge and width are excluded, as are all excise duties/ sales taxes, except the Central Sales Tax, which is included (where applicable). Raw materials surcharges are included (where applicable). The price reported refers to spot orders and is based on a CRU survey of industry participants. Note: (1) Alternatively, FOB mill owned service centre/ retail outlet within these areas. Base price, delivered (Mumbai/Delhi, from the mill) (1), for commercial quality hot-dipped galvanised coil, within standard tolerances and specifically with a pure zinc coating of 120g/m2, on cold-rolled substrate and with a normal surface finish. Extras for gauge and width are excluded, as are all excise duties/sales taxes, except the Central Sales Tax, which is included (where applicable). Raw materials surcharges are included (where applicable). The price reported refers to spot orders and is based on a CRU survey of industry participants. Note: (1) Alternatively, FOB mill owned service centre/ retail outlet within these areas. Iron ore STEELMAKING RAW MATERIALS Prices are shown on a dry basis (unless otherwise stated) in US$/metric tonne ($/t). The Fe grade is stated in the prices table and the levels of impurities for each price reflect industry standards contract prices are based on the average spot price for the quarter in which the ore is delivered. This means that a contract settled in February will be based on an agreed price which reflects the full calendar quarter (January to March). At the end of the quarter, there is likely to be a credit/debit due to the buyer reflecting the actual quarterly average. Please note that there are several methods by which the contract price can be settled, including, for example, a 5 day prior average, a rolling quarter average or previous quarter less one month average. The method adopted can vary from transaction to transaction, however, once a method is established, CRU understands that the parties are bound to this. 7

8 Iron ore freight rates are shown on a wet basis in $/t, reflecting Capesize vessel rates. Metallurgical Coal Prices for Australian spot hard coking coal are FOB Australia, $/ t, including moisture content, for premium hard coking coal with low volatile matter of 20-21%. Contract prices are also shown and are FOB Australia, $/t, including moisture content. Quarterly contract prices, shown since the start of 2010, are reported for hard coking coal, semi-soft coking coal and PCI. These prices represent industry benchmarks agreed between major sellers and buyers of the respective metallurgical coals and these parties may change from one quarter to the next. Therefore, coal specifications may also fluctuate marginally. Monthly contract prices for hard coking coal, reported since May 2012, are also FOB Australia, $/t, including moisture content. They represent agreements priced on a monthly basis from those producers offering such terms to their customers. Metallurgical Coke Prices are shown on an FOB China, $/t, spot basis for commercial quality metallurgical coke with a carbon content of 86%, maximum ash content of 12.5% and CSR 62. Export duties/tariffs Prices from January 2009-March 2010 and July 2011-December 2012 are based on metallurgical coke from Japan, Russia, the Ukraine, Japan, Colombia and Australia. During these select periods, Chinese export prices were not representative of the wider metallurgical coke market, hence, the requirement for an alternative assessment. Note: All prices published are based on a CRU survey of industry participants. The price refers to purchases for forward delivery, according to lead-time, which will vary. BULK FERROALLOYS Manganese alloy & ore Japan CIF Ch $/t 65% 17% 2% China CIF Ind $/t 65% 16% 2% deliv dom incl VAT RMB/t 65% 17% 2% exp FOB $/t 65% 17% 2% High carbon ferromanganese WE DDP /t 76% -- 7% US ex-w $/t 76% -- 7% Japan CIF Ch $/t 75% -- 7% China del dom incl VAT RMB/t 65% -- 7% exp FOB $/t 75% -- 7% Medium carbon ferromanganese WE DDP /t 81% % US ex-w $/t 81% % China exp FOB $/t 78% % Manganese ore CRU spot import1 CIF China China import price (M+1)2 Notes: CIF China Mn (min) $/dmtu 44% lump $/dmtu 43% lump (verified transactions) (1) CRU assessment of average transaction values over the Monitor reporting month with an unspecified loading window. This is the price of a medium grade lump product, CIF China. Before September 2010 the reference grade was 45% Mn. From then on the reference grade is 44% Mn. (2) Average of verified transaction data referring to loading in the month M+1, where M is the Monitor reporting month. Data points are normalised to a benchmark specification of minimum guaranteed 43% Mn lump, CIF China. Our monthly price assessments are representative of the average value of spot transactions to major consumers A typical spot lot size is 500-1,000 t Our assessments are basis the following product specifications. Outside of the Mn, Si and C content of the alloys, we assume standard quality i.e. standard boron, phosphorus, titanium, etc. Silico-manganese Grade Price point Units Mn (Min) Si (Max) C (Max) WE DDP /t 65% 17% 2% US ex-w $/t 65% 17% 2% Silicon metal Our monthly price assessments are representative of the average value of spot transactions to major consumers A typical spot lot size is t Our assessments are basis the following product specifications. Outside of the Si, Fe, Al and Ca content of the alloys, we assume standard quality of other elements, including P and Ti Sizing mm Standard (5.5.3) secondary aluminium grade Grade 8

9 (Max) Price Units Si (Min) Fe (Max) AL (Max) Ca EU DDP /t 98.5% 0.5% 0.5% US ex-w $/t 98.5% 0.5% 0.5% Japan CIF Ch $/t 98.5% 0.5% 0.5% China del dom incl VAT RMB/t 98.5% 0.5% 0.5% exp FOB $/t 98.5% 0.5% 0.5% grade silicon EU DDP /t 99.0%1 0.4% 0.4% 0.1% Note: (1) Some suppliers guarantee 98.5% Ferrosilicon Our monthly price assessments are representative of the average value of spot transactions to major consumers A typical spot lot size is 500-1,000 t Our assessments are basis the following product specifications. Outside of the Si, Al and C content of the alloys, we assume standard quality i.e. standard phosphorus, sulphur, calcium, etc. Grade Ferrosilicon Price point Units Si (Min) Al (Max) C (Max) EU DDP /t 75% 1.5% 0.1% US ex-w $/t 75% 1.5% 0.1% Japan CIF Ch $/t 75% 1.5% 0.1% China del dom incl VAT RMB/t 75% 1.5% 0.1% exp FOB $/t 75% 1.5% 0.1% 9