Methodology
Check SMM methodologies trusted by 400,000+ enterprise users globally.
What is the SMM Methodology?
The SMM Methodology is a systematic price evaluation system established and continuously refined by Shanghai Metals Market (SMM). It aims to provide objective and fair spot price benchmarks for bulk commodities such as metals and chemical materials. Based on actual market transaction data and through a scientifically rigorous evaluation process, this methodology has developed a price reference system widely recognized by enterprises across the industrial chain, serving as a critical basis for commodity pricing in the market.
The core concept of the SMM Methodology is to reflect true market supply-demand dynamics through systematic data collection and quantitative modeling, offering fair price benchmarks for both buyers and sellers. As the first PRA in China to align its price assessment system with the IOSCO Principles and pass independent third-party audits, SMM ensures professionalism, transparency, and reliability. This adherence to international standards enables SMM prices to meet the diverse needs of domestic and global clients, streamlining international trade.
The SMM Methodology upholds the following fundamental principles:
- Market Authenticity Principle : All data collected by SMM is based on the price assessment process. All data undergoes rigorous outlier screening to eliminate questionable, non-replicable, or clearly anomalous information that deviates from normal market ranges. This ensures that the final published prices accurately reflect market conditions.
- Representativeness Principle : SMM has established a comprehensive sample enterprise system and regularly updates price collection samples. This ensures the broad representativeness and stability of data sources. It includes major upstream and downstream participants, traders, and consumers, guaranteeing that prices reflect the supply-demand dynamics of the entire market.
- Methodological Consistency Principle : SMM adheres to standardized evaluation processes to ensure the comparability of price assessments across different periods and product types. Once the methodology is established, it is not altered arbitrarily. Any adjustments are announced to the market in advance, maintaining the continuity and consistency of price series. This stability is crucial for long-term planning and risk management by enterprises.
- Transparency Principle : SMM clearly publishes its price definitions, evaluation processes, and publication standards. This enables market participants to fully understand the specific meaning and formation mechanism of each price.
Explore Methodology for Your Market
How to Use?
Who
International producers, suppliers, traders, importers, end-users, banks, customs authorities, and courts.
How
- Contract formula:SMM benchmark as a formula parameter;
- Spot negotiation:SMM benchmark as a pricing reference;
- Others:Directly used for customs valuation, asset assessment, trade dispute resolution, etc.
Specific Cases
For copper rod manufacturer
As a copper rod manufacturer, we need to purchase 1,000 tons of copper every month to meet production demands. However, negotiating prices with suppliers each month is time-consuming and labor-intensive. We plan to sign a long-term contract with our supplier to lock in the purchase price in advance—but what reference standard should we use to determine this price? What benchmark would both parties find acceptable?
You can use the SMM Benchmark as the basis for the contract price by incorporating it into the pricing formula. Since the SMM Benchmark accurately reflects actual market conditions, both buyers and sellers are protected from losses caused by misjudging market trends, regardless of price fluctuations.
FAQ
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Currently, SMM is the only institution in the Chinese market that has established a valuation methodology tailored to China's trading environment. It strictly adheres to this methodology to assess prices for specific products in specific markets. The SMM Benchmark Methodology more accurately reflects the real situation in the domestic market, thanks to SMM's team of experienced market analysts who closely track market changes, gather more comprehensive and timely market information, and rigorously apply the SMM valuation methodology. This ensures the fairness, objectivity, stability, consistency, and continuity of the prices.
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SMM has strict procedures to filter out speculative transactions and ensure that only genuine commercial transactions are included in our benchmark assessments. Our methodology includes multiple layers of verification to distinguish between speculative and commercial activities, ensuring that our benchmarks reflect actual market conditions rather than speculative price movements.
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SMM maintains strict independence and impartiality in its benchmark assessments. Our methodology includes multiple safeguards against manipulation, including diverse data sources, independent verification processes, and transparent assessment criteria. We are committed to maintaining the highest standards of integrity and objectivity in all our pricing assessments.
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We welcome new users to the SMM Benchmark Methodology. Our team provides comprehensive training and support to help you understand and effectively use our pricing assessments. Please contact our customer service team to learn more about our methodology and how it can benefit your business operations.
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During periods of low market activity, SMM employs alternative assessment methods including expert judgment, historical price analysis, and correlation with related markets. Our experienced analysts use their market knowledge and established methodologies to provide reliable price assessments even when transaction volumes are low.
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If your product does not have an SMM benchmark in your region, we encourage you to contact our team. We continuously evaluate market demand and may consider expanding our coverage to include additional products and regions based on market needs and feasibility assessments.
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SMM includes transactions that meet our strict criteria for inclusion in benchmark assessments. If your transaction was not included, it may not have met our requirements for timing, volume, or market representativeness. Please contact our team for specific information about why your transaction was not included.
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SMM may update its methodology from time to time to reflect changing market conditions and improve accuracy. We provide advance notice to all users when methodology changes are planned, including detailed explanations of the changes and their impact on pricing assessments.
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The SMM Benchmark Methodology can be used in various ways including contract pricing, spot negotiations, customs valuation, asset assessment, and trade dispute resolution. Our team provides comprehensive guidance and support to help you effectively integrate our benchmarks into your business operations.
Robust • Compliant • Trusted
Choosing SMM means you can be confident that we consistently deliver information of the highest quality. Our benchmarks are derived from data collected across a broad spectrum of market participants, including consumers, producers, traders, and distributors.
We employ a rigorous methodology—each benchmark is carefully inspected, verified, and free from conflicts of interest. Most importantly, in every aspect of our work, we adhere to all principles set forth by the International Organization of Securities Commissions (IOSCO) for Price Reporting Agencies. This ensures that our commodity benchmark pricing meets the highest regulatory standards.
Disclaimer
This Disclaimer supplements the Terms and Conditions of this website and does not supersede or affect the validity of other provisions therein. In the event of any inconsistency between this Disclaimer and the provisions regarding SMM prices, price indices, disclaimers, or limitations of liability in the Terms of Use, this Disclaimer shall prevail to the extent not prohibited by applicable law. Provided, however, that if SMM and the user have entered into a formal written agreement containing express provisions regarding the relevant products or services, the terms of such written agreement shall govern.
SMM prices and price indices are independent market price assessments formulated by SMM in accordance with applicable pricing methodologies. These assessments are based on transactions, bids, offers, inquiries, and other relevant market information available prior to the assessment deadline, and are subject to reasonable review, verification, and, where necessary, the application of professional judgment. They are intended to reflect the prevailing market price levels for specific commodities under defined regional, specification, and trading conditions, and do not represent the actual execution price of any single transaction. Under circumstances such as insufficient market liquidity, limited availability of valid trading data, abnormal market volatility, or other exceptional market conditions, SMM may exercise professional judgment to formulate price assessments in accordance with applicable methodologies and available information. Given the limitations in market coverage, liquidity, and information availability, the data obtained by SMM does not encompass all market participants or transactions. Actual transaction prices may also vary due to specific transactional factors, including but not limited to quantity, grade, quality, delivery location and time, as well as payment and credit terms. Therefore, without appropriate adjustments, such prices should not be directly compared or utilized as a substitute.
While SMM exercises reasonable professional prudence and care in the assessment and publication of its prices and price indices, the inherent time-sensitivity, incompleteness, and uncertainty of market information mean that SMM makes no representations or warranties that the relevant prices or information will be entirely free from errors, omissions, delays, or interruptions under any circumstances. Upon discovery of any errors or omissions that meet SMM’s correction policy, SMM will promptly correct and publish the amended data.
SMM prices, price indices, and related information are provided for market reference purposes only and do not constitute any advice or recommendations for investment, trading, procurement, sales, hedging, or other commercial decisions. Users should exercise independent judgment based on their own business circumstances, prevailing market environments, and other appropriate information sources, and must independently evaluate the suitability of SMM prices and related information for their specific purposes. The user shall assume all risks and consequences arising from the utilization of SMM prices or price indices for contract pricing, price adjustments, financial settlements, or any other commercial arrangements.
To the fullest extent permitted by applicable law, SMM shall not be liable for any indirect, incidental, special, punitive, or consequential damages—including, but not limited to, loss of profits, revenue, trading opportunities, or goodwill—arising out of or in connection with the use, inability to use, or reliance upon SMM prices, price indices, or any related information.