Proposal to amend alumina fob Brazil delivery window, frequency

The proposal is to extend the window to 90 days, from two months currently, but deals concluded for loading within 60-90 days will be given a minimum tonnage weighting of 5,000 tonnes.

The index is a tonnage-weighted calculation, where actual transactions carry full weight as reflected by the reported volume, while offers, bids and market participants’ own estimates of the market are weighted at the specified 5,000 tonnes minimum tonnage, as per our methodology.

Fastmarkets has observed an increase in the volume of spot transactions being discarded from the index for being outside its current two-month timing window.

The reason for the minimum tonnage is because some deals for further forward loading have been assessed as reflective of nearby market levels by participants, while in other circumstances cargoes with a future laycan were not seen as reflective of current fundamentals by market participants.

Fastmarkets will continue to track the volume of transactions beyond the current two-month window.

Fastmarkets also invites feedback on whether the proposed change should be for 75 days rather than 90 days.

The current specifications of the index are:
MB-ALU-0003 Alumina index adjustment to fob Australia index, Brazil, $ per dmt
Quality: Smelter-grade alumina, minimum purity of 98.5% Al2O3
Quantity: Min 5,000 tonnes
Location: fob Vila do Conde, Brazil (other Pacific origins normalized)
Timing: within two months
Unit: US$ per dry metric tonne (dmt)
Payment terms: 30 days after loading
Publication: Every second week, 4pm London time
Notes: Bulk carrier

Fastmarkets’ benchmark alumina fob Australia index has a two-month timing window and no changes are proposed for this index.

Fastmarkets is also consulting as to whether the frequency of the Brazil index should be changed to weekly, from its current fortnightly publication, in order to better reflect changes to the market level when transactions take place. Liquidity over the past few months has been inconsistent, however.

The consultation period for this proposed amendment starts from March 24 and will end on April 24. The amendment will then take place, subject to market feedback, on April 27.

To provide feedback on this index, or if you would like to provide price information by becoming a data submitter to this index, please contact Carrie Bone by email at: pricing@fastmarkets.com. Please add the subject heading “FAO: Carrie Bone, re: Alumina index inferred, fob Brazil.”

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