Proposal to amend Fastmarkets’ 66% Fe iron ore concentrate index specs and launch standalone premium index

Fastmarkets proposes to amend the index specifications of its 66% Fe iron ore concentrate index, increase the frequency from weekly to daily, and to launch a standalone premium index to more closely reflect and provide more transparency for the spot prices of iron ore concentrate products.

Fastmarkets proposes to amend the Fe content, silica and phosphorus specifications of its index for iron ore 66% Fe concentrate, cfr Qingdao, $/tonne [MB-IRO-0013] and to increase the publication frequency from weekly to daily.

The current specifications of this index are:

Index: Iron ore 66% Fe concentrate, cfr Qingdao, $/tonne
Fe content: Base 66%, range 63%-70%
Silica: Base 4.5%, max 9%
Alumina: Base 0.5%, max 2%
Phosphorus: Base 0.02%, max 0.06%
Sulfur: Base 0.03%, max 0.10%
Titanium: Base 0.05%, max 0.30%
Moisture: Base 8.0%/DM, max 11.0%/DW
Publication: Weekly. Friday at 6.30pm Singapore time

The proposed new specifications are:

Index: Iron ore 65% Fe concentrate, cfr Qingdao, $/tonne
Fe content: Base 65%, range 63%-66%Silica: Base 6%, max 9%
Alumina: Base 0.5%, max 2%
Phosphorus: Base 0.02%, max 0.10%
Sulfur: Base 0.03%, max 0.10%
Titanium: Base 0.05%, max 0.30%
Moisture: Base 8.0%/DM, max 11.0%/DW
Publication: Daily at 6.30pm Singapore time

The proposed changes of Fe content, silica and phosphorus specifications aim to more closely reflect iron ore concentrate products with iron content within the range of 63% to 66%, of which spot prices tend to show stronger correlation in the CFR China spot market.

Fastmarkets has launched a market consultation for a proposal to launch daily indices for 67.5% Fe pellet feed products which will reflect the spot price for products with iron content within the range of 66-70%.

The proposed change of frequency from weekly to daily follows feedback from market participants that a daily index tracking the price fluctuations during the week would be of value to the market.

All other index specification details outside of Fe content, silica and phosphorus and publication frequency would remain unchanged under this proposal.

Fastmarkets also proposes to launch a standalone premium index for iron ore concentrate products. Iron ore concentrate products are commonly traded with a fixed premium or discount negotiated to the Fastmarkets 65% Fe fines index.

Fastmarkets’ existing iron ore concentrate index reflects the outright price of iron ore concentrates with price data converted into a fixed-price equivalent referencing the forward price of Fastmarkets 65% Fe fines index.

Feedback from market participants suggests that a standalone premium index is in demand to provide more transparency of the spot premium or discount quoted on top of Fastmarkets 65% Fe fines index.

The proposed specifications for the new iron ore 65% Fe concentrate premium index are as follows:

Index: Iron ore 65% Fe concentrate premium, cfr Qingdao, $/tonne
Quality: Fe content: Base 65%, range 63%-66%
Silica: Base 6%, max 9%
Alumina: Base 0.5%, max 2%
Phosphorus: Base 0.02%, max 0.10%
Sulfur: Base 0.03%, max 0.10%
Titanium: Base 0.05%, max 0.30%
Moisture: Base 8.0%/DM, max 11.0%/DW
Quantity: Min 10,000 tonnes
Location: cfr Qingdao – normalized for any Chinese mainland seaport
Timing: Delivery within 8 weeks
Unit: USD/tonne
Publication: Daily at 6.30pm Singapore time
Notes: All origins. Premium quoted on top of Fastmarkets 65% Fe Fines Index

The consultation period for this proposal starts from Monday December 12, 2022, and will end on Friday January 27, 2023. The launch will take place, subject to market feedback, on Wednesday February 1, 2023.

To provide feedback on the proposal, or if you would like to provide price information by becoming a data submitter to this price, please email pricing@fastmarkets.com with the subject heading “FAO: Jane Fan, re: Iron Ore Concentrate Index.”
To see all of Fastmarkets’ pricing methodology and specification documents, please visit https://www.fastmarkets.com/about-us/methodology.

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