Platts to publish new direct reduction iron ore pellet assessments, 65% Fe fines Brazil netback

• Platts to launch new DR pellet premium assessment
• Platts to publish all-in DR pellet FOB Brazil price
• Platts to publish 65% Fe FOB Brazil netback fines price

S&P Global Platts has decided to launch a new, direct-reduction-grade pellet premium and a corresponding all-in DR pellet price on a FOB Brazil basis, as well as launch a new FOB Brazil 65% Fe fines netback, effective April 1, 2020.

67.5% FE DR PELLET PREMIUM: Platts has decided to launch a new monthly assessment of the quarterly contract premium for DR grade iron ore pellet. The assessment will reflect the premium over fines, and following market feedback, it will be net of further iron content adjustments.

The base for the premium will be derived from the 65% Fe CFR China fines assessment, adjusted for iron content (to 67.5%), specific location and basis of sale.

Platts will publish this premium alongside its current DR pellet premium, which is based on the adjusted 62% Fe fines CFR China assessment.

Both assessments will be published on the first business day of the month and will follow the London holiday calendar.

Both assessments will represent the value of the market-based contractual "premium" for high quality DR-grade pellets negotiated and used as a reference in formulating a provisional contract settlement price for pellets typically sold under term contracts to steel mills, primarily in the Middle East, North Africa, and in the Americas.

For its current 67.5% Fe DR grade pellet premium assessment, Platts publishes a premium for high quality pellets over a 65% Fe base. This premium reflected earlier market practice to adjust the 62% Fe IODEX CFR China fines assessment (IODBZ00) for iron content to 65% Fe, with Platts 1% Fe value-in-use differential assessment (IOMGD00), and take into account further price adjustments for specific location and basis of sale.

67.5% FE DR PELLET FOB BRAZIL: Simultaneously, Platts will publish an outright, or "all-in", provisional contract price for 67.5% Fe DR-grade pellets on a FOB Tubarao, Brazil, basis. This price would be calculated as a sum of the assessed premium and the average of the previous month's fines FOB Brazil netback, adjusted to a 67.5% Fe basis. The price will be expressed in dry mt.

65% FE FINES FOB BRAZIL NETBACK: To support the launch of the all-in DR pellet price, Platts will publish 65% Fe fines FOB Brazil netback, which would be calculated on a daily basis.

The price would be a netback from the 65% Fe fines CFR China assessment (IOPRM00), using the Capesize Brazil-China freight rate (IONBR00) for the key iron ore route from Tubarao, Brazil, to China, and will follow the Singapore holiday calendar.

The new pellet prices will be published in the Steel Markets Daily publication, on page 3 and Platts Metals Alert page 1160; and the 65% Fe netback Brazil will be published along with other iron ore netback prices on page 6 of the Steel Markets Daily and Platts Metals Alert page 1106.

Please send all comments, feedback and questions to IODEX@spglobal.com and pricegroup@spglobal.com.

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