The Shanghai Nonferrous Metals Trade Association (SNTA)
yesterday said it would issue its first daily price index for
nonferrous metals today to provide a reliable indicator to users
and investors.
The Shanghai Nonferrous Metals Index (SMMI) is to be based on
the spot prices of the six nonferrous metals - copper, aluminum,
nickel, lead, zinc and tin - published on the Shanghai Nonferrous
Metals Website. The combined output of these six metals accounts
for 90 percent of the country's entire non-ferrous metal
output.
"It is high time to establish a nonferrous metals index in
China. As a big nonferrous metals producer and consumer, we are in
urgent need of a price index to produce our own voice in the
international market and better serve China's enterprises," said
Zhang Minxiang, chairman of Shanghai Nonferrous Metals Trade
Association.
The reference level of 1,000 was based on the spot prices of the
six metals quoted on April 1, 2003. At current prices, the index is
estimated to have risen beyond 3,000, a reflection of the magnitude
of the jump in commodity prices in the past several years.
This first composite spot price index for nonferrous metals, to
be published at noon every weekday, is expected to be closely
watched by metals buyers, particularly makers of electronics,
electrical appliances and cars. In addition, the index should serve
as an important barometer of manufacturing prices that are crucial
to economic planning.
"The SMMI is a composite index that reveals not only the price
trend of one metal, but incorporates major nonferrous metals and
considers the interactions among different markets. The index
should accurately reflect the situation of the whole industry,"
said Tong Leshen, general manager of Shanghai Nonferrous Metals
Trade Association Information Service Center.
The weighting of each nonferrous metal in the SMMI has been set
in accordance with its market share according to figures provided
by the State Statistics Bureau and China Customs. According to the
SNTA, the weighting of the SMMI is going to be adjusted every two
years to keep pace with new developments in the industry.
A total of 105 enterprises ranging from producers of nonferrous
metals to the companies trading in them have been selected to
provide the pricing reference. These companies include 12 listed
companies in the nonferrous metals industry.
The establishment of the composite index should provide the
government with a simplified approach to watching the industry and
enable it to draft appropriate regulatory policies, said Cheng
Daxuan, secretary-general of Shanghai Price Association.
The index is expected to reflect the fundamentals of the
domestic nonferrous metals market, he said.
(China Daily May 28, 2007)