SUBSCRIBER NOTE: TSI to change specifications for 62% CFR China iron ore index

Following an extended period of market consultation, The Steel Index (TSI) will update from January 1, 2018, the specification and delivery port of its index for Chinese iron ore imports of 62% Fe iron ore fines, CFR Tianjin port, to more closely reflect the specifications of the spot market's most liquid products.

The change sees modifications to alumina, sulfur and phosphorus levels, and minimum lot size, as well as a move of the basis port to Qingdao from Tianjin.

Please find below details of the current and future specifications.

Current Future Fe 62% 62% Moisture 8% 8% Alumina 3.50% 2.25% Silica 4% 4% Phosphorous 0.07% 0.09% Sulfur 0.05% 0.02% Min. lot size 20,000 t 50,000 t Delivery port Tianjin Qingdao

This change to the specification follows consistent feedback from market participants across the supply chain, who have requested closer alignment between the specifications of the most liquid iron ore brands and TSI's 62% Fe index specification.

TSI notes that the price difference between the future and current specifications, based on published TSI value-in-use differentials for impurities as well as port differentials, averaged $0.27/dmt over the 18 months to the end of 2016, with the future specification being at a premium to the current specification.

If you have any questions or feedback regarding this change, please send them to feedback@thesteelindex.com.

For written comments, please provide a clear indication if comments are not intended for publication by TSI for public viewing. TSI will consider all comments received and will make comments not marked as confidential available upon request.