MB launches its Iron Ore Index

Metal Bulletin has launched its Iron Ore Index, designed to provide the most accurate representation of the physical seaborne spot market for sinter fines delivered to China.

“I am pleased to announce the launch of MB’s iron ore index, which will track the world’s dominant iron ore merchant market,” said Cameron Hunt, MB director, iron ore index. “The index is quoted on a delivered basis, and will be the first index in the marketplace to aid price transparency and provide a new mechanism for price and risk management.”

The index will allow for the first effective price hedging to take place for what is the world’s largest dry bulk commodity market.

“The MB Iron Ore Index fell to $87.12 per tonne on a 62% Fe content basis cfr China on October 10, having been over $180 per tonne as recently as July,” Hunt continued. “This significant and rapid collapse has been a function of many factors, including the Beijing Olympics, a slowdown of growth in fundamental Chinese steel demand, large iron stocks in Chinese ports and a sharp decline in global freight rates.”

“Trading volumes have also fallen, with a number of buyers staying out of the market as they wait to see at what point prices stabilize before returning,” he added.

Iron ore is one of the last major commodities not to have significant financial trading, and has lagged comparable markets such as steam coal, dry freight, aluminium and oil which are well established.

For more information on MB’s Iron Ore Index please visit www.mbironoreindex.com.