Identify the reference first
A copper price needs a label before it can support a business comparison. LME publishes reference prices in US dollars per metric tonne, while SHFE’s copper quotation notes use renminbi per tonne. The contract, price type and observation time also matter. Converting the currency alone does not make two quotations comparable.
For a European procurement team reviewing a cross-border offer, record the named exchange reference, the applicable quotation period and the mechanism used to determine the final price. A daily observation and an agreed period average answer different questions.
Read the physical adjustment in context
The useful question is what the adjustment to that reference includes. The offer may describe a particular product, location, delivery window and commercial arrangement. Rather than comparing a premium in isolation, place it beside the material specification and the stated delivery basis.
A comparison worksheet can separate the metal reference, stated adjustment, conversion currency, transport assumptions and other expressly included charges. Leave uncertain items visible instead of treating them as zero. This is a framework for asking better questions, not a model of an executable trade.
Keep the comparison reproducible
Save the source, timestamp and assumptions with the calculation. When the comparison changes, identify whether the cause is the metal reference, currency, delivery terms or a revised offer. This helps distinguish a genuine commercial difference from a mismatch in the price basis.
The purpose is clarity: two offers should describe the same commercial question before their numbers are placed side by side.
Sources & further reading
- LME — Official Prices and quotation basis
- SHFE — Statistical data and quotation notes
- ICC — What Incoterms® rules do and do not cover
Research for industry discussion. Product, price and delivery terms need to be checked against the applicable documents and agreements.
Questions or corrections
