Subscriber note: Platts to publish iron ore lump contract premiums

Following industry feedback on the Platts January 30 subscriber note proposing to publish iron ore lump contract price premiums, Platts will publish from March 15, 2013, lump contract price premiums agreed between suppliers and Chinese steelmakers for Australian lump. The lump premium will be updated every calendar quarter, in line with the frequency of most existing agreements between producers and consumers. The premium will be published on a dollar/dry metric ton unit basis, and will represent the most commonly traded brands like Pilbara Blend, Mining Area C and Newman lump. Lump premiums 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. The published lump premiums will represent what Platts 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 levels. The contract price premium would be published in a range. For example, for January-March 2013, the range would be $0.115-0.116/dmtu, as per a Platts December 21, 2012, news report on the matter. Lower contract price premiums of $0.10-0.110/dmtu were reportedly obtained by one buyer, but they would not be reflected as they may not be representative of prices reached in the broader market. The lump premium would be published in the Platts SBB Steel Markets Daily, on Platts Metals Alert and in the Platts SBB Steel Price Analyzer. It will 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 known price of fines and the lump premium. Separately, Platts has also received industry feedback for it to publish a spot price assessment for lump. Platts is continuing to study the market to determine the feasibility of publishing a weekly assessment of the spot lump premium, and is inviting industry feedback and questions by March 15, 2013, which should be addressed to Keith Tan, keith_tan@platts.com with a copy to iodex@platts.com and pricegroup@platts.com.