This is in response to market feedback following its proposal to make the amendment.

Fastmarkets proposes to change the specification for its chrome ore South Africa UG2 concentrates index basis 42%, cif China to include increasing the minimum tonnage and defining the location.

These two additional amendments follow market consultation about the inclusion of MG material and to amend some qualities, including to clarify a base chrome iron ratio and to implement a normalization process to meet this base level.

Fastmarkets also proposes changing the publication time.

The proposed specifications would be (proposed changes in bold):
MB-CHO-0003: Chrome ore South Africa UG2/MG concentrates index, cif China, $/tonne
Quality: Up to 2mm (99% min); Cr range 40-42%; Silica max 6%; Alumina max 18%; MgO max 16%; P max 0.01%; S max 0.01%; chrome iron ratio 1.27:1-1.35, basis 1.27:1
Quantity: Min 5,000 tonnes
Location: cif Tianjin, China (normalized for any Chinese mainland sea port)
Unit: USD per tonne
Payment terms: Payment at sight
Publication: Weekly. Tuesday, 2-3pm London time
Notes: Bulk (container deals normalized)

The current specifications are as follows (proposed items to change in bold):
MB-CHO-0003: Chrome ore South Africa UG2 concentrates index basis 42%, cif China, $/tonne
Quality: Up to 1mm (95% min); Cr base 42%, range 40-43%; Silica max 6%; Alumina max 18%; MgO max 15%; P max 0.01%; S max 0.01%; chrome iron ratio 1.2:1 min
Quantity: Min 2,000 tonnes
Location: cif China
Unit: USD per tonne
Payment terms: Payment at sight
Publication: Weekly. Tuesday, 3pm London time
Notes: Bulk (container deals normalized)

The latest proposal included in the extended consultation would increase the minimum tonnage to 5,000 from 2,000 currently. This has been proposed in response to the sparse volumes of liquidity reported at below 5,000 tonnes and the additional costs that would likely be incurred for lower volumes.

The location would be refined to cif Tianjin, China, with normalization in place for other Chinese ports to clarify where activity is taking place and to allow adjustment for alternatives.

Informal market consultation suggests these changes would better reflect the composition of the material being traded.

Normalization of prices according to chrome iron ratios would be applied to bring higher-ratio premiums down to the basis level. The normalization would be updated at the beginning of each calendar quarter only, and the average premiums/discounts observed in the previous three months of data will be used.

Changing the publication time would bring this assessment in line with most other metal, ore and alloy assessments.

The extended consultation period for this proposed amendment starts on October 28 and will end on December 2, with changes taking place, subject to market feedback, from December 7.

To provide feedback on these indices or if you would like to provide price information by becoming a data submitter to these indices, please contact Jon Stibbs or Siyi Liu by email at pricing@fastmarkets.com.

Please add the subject heading "FAO: Jon Stibbs, Siyi Liu re: extended amendment to UG2 index."

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