PRICING NOTICE: Proposal to amend Metal Bulletin's 62% Fe iron ore fines price specification

Metal Bulletin is proposing to refine its existing coverage of the 62% Fe iron ore fines market to provide a clearer reflection of the mid-grade market segment, as distinct from other grade brackets.

Metal Bulletin is proposing to refine its existing 62% Fe iron ore fines price (MBIOI-62) to provide a clearer reflection of the mid-grade market, removing direct influence from data pertaining to other grade brackets.

At present Metal Bulletin incorporates data with an iron content specification range of 56% to 66% Fe in its MBIOI-62 index, provided that data meets the other chemical and physical specifications for the index.

The rationale behind the present wide specification range has been the liquidity enhancement achieved by normalizing a broad spectrum of data to the index base. Historic analysis of normalization precision has until recently supported the notion that this specification range has enhanced liquidity without sacrificing precision in reflecting the index base.

But owing to an observed increase in inter-grade and inter-product price volatility, it has become notably more challenging for the index normalization procedure to reflect the often rapidly changing spreads between product qualities. For this reason Metal Bulletin is proposing to narrow the MBIO-62 specification range to reflect only of products in the mid-grade bracket - ie, iron content between 60 and 63.5% Fe.

Subject to market feedback, the specification for the 62% Fe iron ore fines price will be amended to include only data within the 60-63.5% Fe range, provided it also meets the other specification requirements for the index.

Data will still be normalized to the index base level, which would remain unchanged from its current specification.

The full proposed new specifications for the MBIOI-62 would be as follows:

Price: US$ per dry metric tonne, CFR China
Material Origin: All Origins
Fe Content: Base 62%, Range 60% to 63.5%
Silica: Base 3.5%, Maximum 8%
Alumina: Base 2%, Maximum 4%
Phosphorus: Base 0.10%, Maximum 0.15%
Sulphur: Base 0.02%, Maximum 0.06%
Loss on Ignition (%DW): Base 4.7%, Maximum 11%
Moisture: Base 8%, Maximum 10%
Granularity: Base Size >90% < 6.3mm, at least 90% <10mm,
at most 40% <0.15mm
Trade Size: Minimum 30,000 tonnes
Payment Terms: Payment at sight, other terms normalized to base
Delivery Port: Base Qingdao, normalized for any
Chinese mainland sea port
Delivery period: Within 8 weeks
Publication: Daily at 6.30pm Singapore time

The consultation period for this proposed amendment will end two months from the date of this pricing notice, on September 12, 2018, with changes taking place, subject to market feedback, from October 1, 2018. 

To provide feedback on this price or if you would like to provide price information by becoming a data submitter to this price, please contact Peter Hannah by email at: pricing@metalbulletin.com. Please add the subject heading ‘FAO: Peter Hannah, re: MBIOI-62.’

To see all Metal Bulletin’s pricing methodology and specification documents go to: www.metalbulletin.com/prices/pricing-methodology

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