Price Series

A normal price series is used for known prices: prices that the market defines and publishes with a specific period (daily, weekly, monthly and so on). Because these prices are unique and known for the period, they are modelled as a one-dimensional array. Each value in the array represents one event (that is, a day, a week or a week, month). Price series are referenced when entering general details for material contracts, specifying contract pricing in specific time periods, and used to determine the price of the analyte, product or material when calculating invoices, processing despatch order snapshots and in hedging.

A price series can be associated with a forward curve for prices that are not yet known.

Alternatively, forward values can be determined from a premium matrix. If a price series is associated with a premium matrix, the price series cannot be used for regular pricing, such as in quotation pricing in contract terms. The price series is used for determined the value of a contract charge.

Forward Curve Price Series

The future values of commodities are periodically published by various third-party organisations, on a weekly, monthly or quarterly basis. With these future values of commodities, nothing is known; all the prices are speculative and subject to change due to varying events in the market. Depending on the publishing organisation, the future values of commodities are recalculated for 6, 12 or 24 months ahead. Many of these organisations also publish the final known actual values of commodities. Speculative pricing for a set period ahead generates a price series for each defined instance (day, week, month, and so on) in the future. This means that each defined instance in the future represents a 'normal' price series. This pricing method is known as forward curve pricing, and is modelled as a two-dimensional array. Each row in the array represents the future prices as published on that applicable day. Only future prices can be entered in the array because it makes no sense to enter historical prices. A future price series could exist where the applicable date is monthly, but the forward prices are weekly, or vice versa, or any combination. Each dimension in the matrix has its own frequency.

Market configuration can include prompt calendars and prompts that affect the determination of forward prices. See Commodities, Markets and Market Commodities.

MineMarket can estimate missing forward curve prices by linearly interpolating between available prices or extrapolating from available prices. These estimated prices are saved in the MineMarket database, and can be overridden if published prices become available. You can specify how far into the future MineMarket should extrapolate the prices.