SteelBenchmarker™ Attributes
The SteelBenchmarker™ is designed to provide a reliable set of benchmark prices for use by participants in the steel industry without requiring the disclosure of their actual transaction prices. The steel products for which we ask the providers to give their price assessments are the benchmark (or generic) ones that are used day in and day out when buyers and sellers are seeking to “discover” the base market price for the commodity in question.
For the home markets, the price assessment is the booking price, ex-works (FOB mill), for near-term delivery for commodity-grade product for the mid-sized buyer. For the export market, it is the price assessment of the average price, for nearby and distant customers, FOB the port of export. For steel scrap, the price assessment is for the USA, delivered to the steel plant.
The price input assessments are totally confidential.
Benchmark prices published will be based on the average of the price assessments received.
There will be a sufficient number of price assessment inputs, and a statistical method to remove the outliers, that the reported results should be valid statistically. No individual company's reported assessments will represent more than fifteen (15) percent of the assessments used to calculate any reported benchmark price. In order to ensure that this is the case, if, for any product, fewer than fourteen (14) price inputs are reported by companies providing assessments, no single company will be allowed to designate more than one assessment provider with respect to that product.
Benchmark prices will be published simultaneously on the second and fourth Wednesday mornings of each month.
SteelBenchmarker™ providers will be e-mailed the steel benchmark price results at the same time they are released. Non-providers may subscribe to receive the benchmark price release time-delayed.
Steel benchmark prices will be “robust.” The word “robust” in the world of financial derivatives means that the price is accurate and not able to be manipulated. Our goal is to have at least 25 to 50 inputs for each product.
When providers e-mail their price assessments, they will not receive any feedback if their assessments as to the prices are high or low, and/or have been eliminated as outliers.
The benchmark prices will be calculated by a third-party computer that is looking at the price inputs but not the names of the providers. Fall back procedures will be set in place to publish the steel benchmark prices and take corrective actions if there are unexpected problems.
An outside auditor will regularly audit, on an unannounced basis, the SteelBenchmarker™ processes and procedures.