Reviews in March, June, September and December; new prices valid from 1 Jan / 1 Apr / 1 Jul / 1 Oct.
Filters out minor fluctuations. Below the trigger the base stays unchanged, so small moves accumulate until they matter. In the engine below the triggers are adjustable — they are the negotiable part of the mechanism.
Metal prices from the LME series (published monthly, here via the World Bank Pink Sheet); USD/CNY from x-rates.com. Brass = 60% copper + 40% zinc. Nobody negotiates the number itself.
Material cost and currency are calculated separately, then added to the current unit price.
FOB / FCA: the new price applies by PO date. SMI / VMI: by call-off date.
| Type | Formula | Source |
|---|---|---|
| Raw material | ΔM = (New base − Old base) ÷ 1,000,000 × net weight (g)variance = (New − Old) ÷ Old | LME monthly average (brass = 60% Cu + 40% Zn) |
| Currency FX | ΔFX = (Old FX ÷ New FX − 1) × old unit pricevariance = Old FX ÷ New FX − 1 | x-rates.com (USD vs CNY) |
Dead-band logic: while the variance stays inside the trigger the old base is kept; once it is exceeded the new base replaces it. The initial base is the average of the month of the original quotation.
Reading the table. The price valid from 1 April is built from the average of December, January and February. Those months are complete by early March, leaving a month to review and notify before the new price starts. Currency uses the identical windows.