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Market pricing for a range of financial instruments and commodities has run into considerable controversy in recent years with accusations of price manipulation to the detriment of consumers.
This has led to regulators and market participants making wholesale reviews of market practices.
This white paper entitled 'Challenges of Price Discovery in Illiquid Commodity Markets' argues that the practice of price reporting agencies assessing values of thinly traded commodities such as minor metals and rare earths remains the best approach for these markets.
But even for more bulk commodity markets such as ferro-alloys there are strong arguments for pricing to continue with price reporting agencies.
This white paper examines alternatives such as moving pricing of thinly traded commodities to exchanges. It even considers more radical approaches such as ceasing price assessment and the likely impact for these markets.
This paper was written by Justin Pugsley at JJPassociates (www.jjpassociates.co.uk) on behalf of specialist publishing and price reporting agency Metal Pages.