PRICING NOTICE: Proposal to launch 62% Fe Brazilian Iron Ore Fines Index
Metal Bulletin is proposing the launch of a new 62% Fe iron ore fines index that will provide a more representative reflection of the typical specification profile of Brazil-origin mid-grade fines.
The daily spot index for Brazil-origin iron ore fines will be based on a content specification of 62% iron, 1.5% alumina and 5% silica. It will appear on the MBIOI website as MBIOI-62-BZ.
The new Metal Bulletin 62% Fe Brazilian Iron Ore Fines Index is being proposed in response to market demand for increased transparency around the price level that this grade of material achieves in the spot market. The price represents 62% Fe iron ore exported from Brazil but the delivery terms are cfr China.
The recent increase in the market’s price sensitivity - to alumina, in particular - has led to a significant divergence in spot-price levels for a number of prominent iron ore products, according to their gangue chemistry. A new index based on the typical specification of mid-grade Brazilian iron ore fines would provide a more representative reflection of the value of this type of material than is currently offered by existing available references.
The new index will follow the same methodology as Metal Bulletin’s other iron ore indices, but will not include separate sub-indices for producers, consumers and traders.
Internal calculation of a historical series for this index shows that the vast majority of eligible transactions for this index occur on a transparent platform basis, and are therefore not deemed to pertain to any particular market segment.
The consultation period for this proposed launch will end one month from the date of this pricing notice, on August 24, 2018. Subject to the results of this consultation, the proposed index would be launched on Monday August 27, 2018, accompanied by a six-month historical price data series.
Metal Bulletin’s index methodology screens outliers and applies a quantity weighted model to ensure that the Metal Bulletin 62% Fe Brazilian Iron Ore Fines Index is the most robust in the industry.
Metal Bulletin has no financial interest in the level or direction of the index.
To provide feedback on these prices, or if you would like to provide price information by becoming a data submitter to these prices, please contact Peter Hannah by email at: email@example.com. Please add the subject heading FAO: Peter Hannah, re: 62% Fe Brazilian Iron Ore Fines Index
To see all Metal Bulletin’s pricing methodology and specification documents, go to: www.metalbulletin.com/prices/pricing-methodology
The full proposed specification for this index is as follows:
Price: US$ per dry metric tonne, cfr China
Material Origin: Brazil
Fe Content: Base 62%, Range 61% to 63%
Silica: Base 5.0%, Maximum 7.0%
Alumina: Base 1.5%, Maximum 1.9%
Phosphorus: Maximum 0.08%
Moisture: Base 9.0%, Maximum 10.0%
Granularity: >90% <10.0mm, at least 35% >1.0mm, at most 45% <0.15mm
Trade Size: Minimum 30,000 tonnes
Payment Terms: Payment at sight, other terms normalized to base
Delivery Port: Base Qingdao, normalized for any Chinese mainland sea port
Delivery period: Within 10 weeks
Publication: Daily at 6.30pm Singapore time