Following a two-month consultation during which favorable feedback was received, Fastmarkets will launch a standalone pellet premium index reflecting the premium that high-quality international pellets achieve over its 65% Fe fines Index on a cfr China spot basis. This will replace its existing implied pellet premium (MB-IRO-0150), which will henceforth be discontinued.
This new launch aims to satisfy demand from market participants to more clearly and transparently track the premium that higher-quality international pellets can achieve on a cfr China spot basis, where they are most commonly traded with a fixed premium negotiated to the Fastmarkets 65% Fe fines Index. China’s growing appetite for higher-quality iron ore, including pellets, is seeing an increase in the frequency of top-tier pellet cargoes being sold on this basis that market participants expect will continue into the future.
The specifications for the new pellet premium index are as follows:
MB-IRO-0177 – Iron ore pellet premium over 65% Fe fines, cfr China
Quality: Fe: base 65%, min 64.5%; Si: base 4.5%, max 6.0%; Al: base 0.4%, max 0.6%; P: base 0.03%, max 0.05%; S: base 0.01%, max 0.02%; Moisture: base 2.0%, max 3.0%; CCS: base 230 daN, min 220 daN; Sizing: <5% <5.0mm
Quantity: min 10,000 tonnes
Location: cfr Qingdao (other main sea ports normalized)
Timing: delivery within eight weeks
Unit: $ per dry metric tonne
Publication: Weekly on Friday, 6.30pm Singapore time
To provide feedback on this launch, or if you would like to provide price information by becoming a data submitter, please contact Peter Hannah by email at pricing@fastmarkets.com. Please add the subject heading ‘FAO: Peter Hannah re: Launch of Pellet Premium Index’
To see all Fastmarkets’ pricing methodology and specification documents, go to https://www.fastmarkets.com/about-us/methodology.
