Q1:There are many local information providers that provide commodity prices in China. How are they different from SMM price assessments and which can better represent the actual market situation in China?
A1:SMM is the only information provider in China that has built a price assessment methodology that aligns with the Chinese trading market. It assesses the price of a certain product in a certain market in compliance with the SMM price assessment methodology. SMM assessments can better represent the actual market in China because we have an extensive team of professionals who closely track market changes, collect the most adequate, comprehensive and timely market information and assess prices in compliance with the SMM price assessment methodology. This ensures the prices are impartial, objective, and timely.
Q2:There are a lot of speculators in the market whose transaction prices are often at variation with the actual situation. Would SMM include such prices in its assessments?
A2:In principle, SMM price assessments do not include biased transaction prices.
Q3:Would SMM assessments be manipulated by a few participants and lose its impartiality?
A3:No. Impartiality is the basis of how SMM operates as a price reporting agency in China. To achieve impartiality, SMM broadly samples active market participants, evaluates the fairness of their offers, bids, and trades, and exclude data short of the standards above from its price assessments.
Q4:We would like to use SMM assessments and know more about the methodology.
A4:We offer SMM price assessment methodology for free for anyone who would like to become a user of SMM assessments. You can download the documents from our website or call us. Only when you fully understand the SMM price assessment methodology can you know how to use SMM assessments. We also believe that you will trust the SMM assessments more when you understand the process and terms of the assessments.
Q5:How does SMM assess prices under certain market conditions such as when transactions are few in a stagnant market?
A5:SMM offers price assessments on typical markets with active trading. The assessment is based on transactions that are confirmed by either party in the transaction or a credible third party. SMM assessments cover market transactions that are known to SMM, confirmed or reported. Under special circumstances such as when no transactions are known by SMM, confirmed or reported, SMM will make an assessment based on the counterparties’ intentional trading range or the trading range that SMM deems most possible.
Q6:If there are no SMM assessments of the product I’m working on in a certain region, what can I do?
A6:Not all products across all regions are suitable for assessment. SMM believes that only typical markets with active trading are suitable for assessment. The region selected by SMM is likely to be the most active and typical area. If there are no SMM assessments in the region where you are, you can select SMM assessments from another region, with an addition of a coefficient to obtain assessments for your region.
Q7:Why was the price of one of my transactions not included in the assessment?
A7:For SMM assessments to be thoroughly representative, there are strict standards for every price in the SMM price assessment methodology. These standards include regions, time, cargo volumes, payment terms payment and dates of arrival. If any transaction fails to meet these standards, it will be excluded from the assessment. Such strict standards ensure the credibility of SMM assessments.
Q8:Would the SMM price assessment methodology of a certain product change? If it does, will users be notified?
A8:The SMM price assessment methodology is not subject to frequent changes. Developed through rigorous processes and after multiple revisions, it is an accurate representation of current market conditions. However, under special circumstances such as when trading volumes in a certain market shrink or when there are different terms of payments for most transactions, SMM will revise the methodology according to market conditions. Revisions will only be made after consulting clients. SMM will inform clients of changes ahead of time.
Q9:How can SMM assessments be applied?
A9:SMM assessments are basis prices and could be used in the following ways:
·As formula parameters in sales contracts
·As a reference in spot pricing negotiations
·In price checks, assets valuation, resolving trade disputes, etc