Methodology
Check SMM methodologies trusted by 400,000+ enterprise users globally.
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 the true market supply-demand dynamics through systematic data collection and scientific model calculations, offering fair price references for both buyers and sellers. The methodology strictly adheres to the Principles set by the International Organization of Securities Commissions (IOSCO), ensuring professionalism, transparency, and reliability in the evaluation process. This compliance with international standards enables SMM prices to meet the pricing needs of both domestic and overseas clients, facilitating transactions.
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.
Base Metals
- SMM Aluminum Price Methodology.pdf
- SMM Copper Price Methodology.pdf
- SMM Lead Price Methodology.pdf
- SMM Nickel Price Methodology.pdf
- SMM Tin Price Methodology.pdf
- SMM Zinc Price Methodology.pdf
Ferrous Metals
- SMM Ferrous Metals Price Methodology.pdf
- SMM Iron Ore Price Methodology.pdf
Scrap Metals
- SMM Aluminum Price Methodology.pdf
- SMM Battery Raw Materials Price Methodology.pdf
- SMM Copper Price Methodology.pdf
- SMM Iron Ore Price Methodology.pdf
- SMM Tin Price Methodology.pdf
Precious Metals
- SMM Precious Metals Price Methodology.pdf
New Energy
- SMM Battery Raw Materials Price Methodology.pdf
- SMM Hydrogen Energy Price Methodology.pdf
Rare Earth
- SMM Rare Earth Price Methodology.pdf
Minor Metals
- SMM Chromium Price Methodology.pdf
- SMM Manganese Price Methodology.pdf
- SMM Minor Metals Price Methodology.pdf
- SMM Silicon Price Methodology.pdf
Photovoltaic
- SMM Solar Price Methodology.pdf
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.