Proposal to launch 67.5% Fe iron ore pellet feed indices

Fastmarkets’ proposal follows initial feedback that market participants demand a transparent price reference for high-grade pellet feed products sold in the CFR China spot market.

High-grade pellet feed products are commonly traded with a fixed premium negotiated to the Fastmarkets 65% Fe fines Index. Steelmakers’ growing appetite for higher-quality iron ore, including pellet feed which is used for producing high-grade blast-furnace pellet and direct-reduction pellet, has led to an increase in the frequency of high-grade pellet feed cargoes being sold on this basis.

Market participants expect the demand to continue to rise in the future and desire a transparent spot index to reflect the value of the products.

Fastmarkets proposes to launch a daily 67.5% Fe iron ore pellet feed premium index to track the fixed premium quoted above Fastmarkets 65% Fe fines index, and a corresponding daily 67.5% Fe iron ore pellet feed index to reflect the outright price of high-grade pellet feed products.

Materials falling within the specification ranges detailed below can be included in the calculation of the indices and normalized to index base specification.

The proposed specifications for the new 67.5% Fe iron ore pellet feed premium index are as follows:

Index: Iron ore 67.5% Fe pellet feed premium, cfr Qingdao, $/tonne

Quality: Fe content base 67.5%, range 66%-70%; silica base 3%, max 6%; alumina base 0.5%, max 1.5%; 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; granularity max size >80% <0.15mm

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 above Fastmarkets 65% Fe Fines Index

The proposed specifications for the new 67.5% Fe iron ore pellet feed index are as follows:

Index: Iron ore 67.5% Fe pellet feed, cfr Qingdao, $/tonne

Quality: Fe content base 67.5%, range 66%-70%; silica base 3%, max 6%; alumina base 0.5%, max 1.5%; 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; granularity max size >80% <0.15mm

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.

The consultation period for this proposal starts from Friday December 9, 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: 67.5% Fe Iron Ore Pellet Feed Index.”To see all of Fastmarkets’ pricing methodology and specification documents, please visit https://www.fastmarkets.com/about-us/methodology.