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

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

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

67.5% FE DR PELLET PREMIUM:

Platts has launched a new monthly assessment of the quarterly contract premium for DR grade iron ore pellet (IODBP00). The assessment reflects the premium over fines, and is net of iron content adjustments. The basis for the premium is derived from the 65% Fe CFR China fines assessment, adjusted for iron content (to 67.5%), specific location and basis of sale.

Platts is publishing this premium alongside its current DR pellet premium (IODRP00), which is based on the adjusted 62% Fe fines IODEX CFR China assessment.

From April 2020, the premium is based on the 62% Fe IODEX CFR China assessment, adjusted for specific location, basis of sale and quality to the 67.5% Fe specification, and the premium is net of adjustments for iron content.

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

Both assessments 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.

67.5% FE DR PELLET FOB BRAZIL:

Platts has launched an outright, or "all-in", provisional contract price for 67.5% Fe DR-grade pellets on a FOB Tubarao, Brazil, basis. This price is calculated as a sum of the assessed premium (IODBP00) and the average of the previous month's fines FOB Brazil netback (IOFBN00), adjusted to a 67.5% Fe basis. The price is expressed in dry mt (IODBR00) and in dry mt unit (IODBU00).

65% FE FINES FOB BRAZIL NETBACK:

Platts has started publishing the 65% Fe fines FOB Brazil netback (IOFBN00), calculated on a daily basis.

The price is a netback from the 65% Fe fines CFR China assessment (IOPRM00), calculated using the Capesize Brazil-China freight rate (IONBR00) for the key iron ore route from Tubarao, Brazil, to China, and using a 8.5% moisture rate per the 65% Fe iron ore index specification. The netback publication follows the Singapore holiday calendar.

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