SUBSCRIBER NOTE: Platts to publish iron ore lump contract price premiums

Following industry feedback, Platts proposes to launch from March 1, 2013, contract price lump premiums agreed between suppliers and Chinese steelmakers for Australian iron ore lump. The lump premium would be published quarterly, in line with the frequency of most extant agreements between producers and consumers. The lump premium would be published on a dollar per dry metric ton unit basis, and would represent the most commonly traded brands like Pilbara Blend, Mining Area C and Newman lump. Lump premiums may vary from company to company, depending on when agreements are reached, brands, volumes, and whether they are negotiated as a package with other products like fines. Platts is inviting feedback on its plan to publish the premiums it understands most Chinese mills have agreed to. Premiums that are settled under known, special circumstances, would be reported about in news articles, but would be excluded from the published premium. The proposed lump premium would be published in a range. For example, for the first quarter of calendar 2013, the range would be $0.115-0.116/dmtu, as per Platts December 21, 2012, report on the matter. Lower contract price premiums of $0.10-0.110/dmtu were obtained by one particular buyer, but they would not be reflected as they may not be representative of the prices reached with the broader market. The lump premium would be published in Platts SBB Steel Markets Daily, Platts Metals Alert and the Platts SBB Price Analyzer. It would supersede the SBB Hamersley Pilbara Bld Lump 63.5% Fe Jap Aus Exp FOB W Aus Port (SB01111) assessment in the Platts SBB Steel Price Analyzer, which is a quarterly calculation of the price of lump based on the price of fines and the lump premium. Separately, due to there being limited liquidity in the spot market for lump, Platts continues to review the feasibility of publishing a spot price assessment for it, and invites industry feedback on the matter. Please address any feedback or questions by February 22, 2013, to Keith Tan, keith_tan@platts.com with a copy to iodex@platts.com and pricegroup@platts.com.