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The consultation was extended for a further month from March 3.
The consultation sought to ensure that the specifications and methodology for our iron ore pricing continue to reflect the physical market. This includes all elements of our pricing process, our price specifications and publication frequency.
Upon the first close of the consultation on February 26, comments and feedback received had suggested that some material changes may indeed be required to the existing methodology. These included suggestions to launch a pellet premium index to 65% Fe fines on a cfr China basis, as well as feedback that our methodology for the incorporation of index-linked (often referred to as “floating price”) spot activity may benefit from being refined.
In response to the suggestion of a pellet premium index, Fastmarkets initiated a two-month consultation proposing the launch of such a price.
In response to the latter suggestion of refining our processes for incorporating price information from index-linked spot activity, Fastmarkets decided to extend this open consultation by one month to source more market feedback prior to launching a separate formal consultation on a potential change in its approach. Given the further supportive feedback received during this period, Fastmarkets has now launched a three-month consultation proposing a change in its methodology for incorporating floating-price information.
During the extended consultation period, it was also suggested that Fastmarkets make changes to its cfr China Blast Furnace Pellet Index (MBIOI-PT) specification. One market participant was in favor of realigning the MBIOI-PT base specification to reflect the chemistry of India-origin pellet cargoes that make up the prevailing source of liquidity to this index.
But opposing feedback was received from other market participants citing the value of continuing the MBIOI-PT index’s long and consistent historical data series for this price discovery point. Several sources who provided feedback on this index, however, suggested redefining the maximum impurity ranges for its chemistry specification to reflect the fact that India-origin cargoes are included and normalized in its calculation. Fastmarkets is therefore initiating a one-month consultation on this proposed change, which is expected to have an immaterial impact on the price.
Beyond this open consultation, Fastmarkets also invites feedback on a continuing basis throughout the year. To provide comment or feedback on the content of the iron ore index methodologies, or if you would like to provide price information by becoming a data submitter to these indices, please email pricing@fastmarkets.com. For feedback or comment related to iron ore, please add the subject heading “FAO: Peter Hannah, re: Iron Ore Methodology.” To see all of Fastmarkets’ pricing methodology and specification documents, go to: https://www.fastmarkets.com/about-us/methodology.