Fastmarkets proposes to amend the silica and alumina base specifications of its index for iron ore 62% Fe fines, cfr Qingdao, $/tonne [MB-IRO-0008].

The current chemical specifications of this index are:

Fe content: Base 62%, range 60% to 63.5%
Silica: Base 3.5%, maximum 8.0%
Alumina: Base 2.0%, maximum 4.0%
Phosphorus: Base 0.10%, maximum 0.15%
Sulfur: Base 0.02%, maximum 0.06%
Loss on Ignition (%DW): Base 4.7%, maximum 11.0%
Moisture: Base 8.0%, maximum 10.0%

The proposed new specifications would be:

Fe content: Base 62%, range 60% to 63.5%
Silica: Base 4.0%, maximum 8.0%
Alumina: Base 2.3%, maximum 4.0%
Phosphorus: Base 0.10%, maximum 0.15%
Sulfur: Base 0.02%, maximum 0.06%
Loss on Ignition (%DW): Base 4.7%, maximum 11.0%
Moisture: Base 8.0%, maximum 10.0%

The proposed changes of the silica and alumina base specifications aim to more closely reflect the chemical composition of mainstream mid-grade ores produced from Australia’s Pilbara region.

In the calculation of the index, price data of material with specifications different from that of the index base specification is normalized using in-house developed models based on regression analysis. The proposed changes of base specifications are intended to increase the predictability of the index calculation by helping reduce the degree of normalization required to adjust prices for the most liquid Australian mid-grade products to the index base specification.

All other chemical and physical specification details outside of the silica and alumina base levels would remain unchanged under this proposal.

Fastmarkets also proposes to discontinue its iron ore product differential - 62% Fe Pilbara Blend Fines, cfr Qingdao, $/tonne [MB-IRO-0076] and associated implied product index - iron ore 62% Fe Pilbara Blend Fines, cfr Qingdao, $/tonne [MB-IRO-0114].

Fastmarkets’ Pilbara Blend Fines product differential tracks the daily premium or discount that transparent fixed-price spot transactions realize relative to the value of the Fastmarkets iron ore 62% Fe fines, cfr Qingdao, $/tonne [MB-IRO-0008].

The discontinuation of these prices is proposed due to a reduction in frequency of fixed-price transactions for Pilbara Blend Fines in the seaborne spot market over the past one to two years. In addition, the differential index would become less meaningful if, under the proposed specification changes, Fastmarkets' 62% Fe fines index more closely reflects the composition of mainstream Pilbara region products.

The consultation period for the proposal starts from Monday October 4, 2021, and will end on Friday December 31, 2021. The amendment will then take place, subject to market feedback, on Monday January 3, 2022.

To provide feedback on the proposal, or if you would like to provide price information by becoming a data submitter to this price, please email pricing@fastmarkets.com with the subject heading "FAO: Jane Fan, re: MBIOI-62”.

To see all of Fastmarkets’ pricing methodology and specification documents, go to https://www.fastmarkets.com/about-us/methodology.