Setting Prices by Word of Mouth

For many raw materials, benchmarks are subjective
Iron ore mine at Mount Whaleback, Australia Photograph by John W Banagan/Getty Images

Prices for stocks, bonds, and currencies are set by billions of trades on public exchanges. Futures contracts for many commodities trade on exchanges almost around the clock. In contrast, deals for the delivery of commodities—raw materials such as coal, iron ore, fertilizer, gas, and some metals—are often made in private using benchmark prices determined by industry publications.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.