“The [Fastmarkets MB 65% Fe Iron Ore Index] is the new reference index and the premiums for blast furnace and direct-reduction pellets remained the same as [that in] 2018 - $60 per tonne on average,” the miner said on Thursday March 28.

Some 84% of Vale’s sales in the fourth quarter of last year consisted of premium products such as iron ore pellets, Carajas and Brazilian Blend fines, pellet feed and low-alumina sinter feed. In the same period of 2017, these accounted for 70% of its sales.

Market sources told Fastmarkets earlier this month that they had signed term contracts for this year’s pellet shipments using the Fastmarkets MB 65% Fe index as the basis for pricing. The move reflects a general shift among market participants toward price references that are more closely aligned with the category of the products in question.

Fastmarkets will start publishing an implied spot blast furnace pellet premium over the Fastmarkets MB 65% Fe Iron Ore Index alongside the existing implied premium over the Fastmarkets MB 62% Fe Iron Ore Index, in response to these market developments.

Vale produced 55.3 million tonnes of pellets last year, up about 10% from 2017. In the fourth quarter alone, the miner’s pellet output rose 22.6% to 15.8 million tonne.