S&P Global Platts amends 58%-Fe iron ore CFR China specifications

Effective May 4, 2020 and as part of an overall revision of its iron ore coverage, S&P Global Platts has amended the specifications of the 58% iron ore fines assessment (IODFE00) to align them with the major Australian brands and reflect the average specification of global brands in this segment of the iron ore market.

The assessment now reflects material with 2.9% alumina, 6% silica and 0.06% phosphorus.

Platts first published the proposal on January 31, 2020 in a subscriber note available here: https://www.spglobal.com/platts/en/our-methodology/subscriber-notes/013120-sampp-global-platts-proposes-changes-to-its-58-fe-iron-ore-coverage. Market participants across the supply chain stated the amendments would be more reflective of current iron ore brands with iron content below 60% in the market, and that the change would allow for liquidity in this segment of the market to be pooled together around a single assessment.

Under the new specifications, all iron ore fines with iron content below 60% will be considered under the 58% iron ore fines CFR China index and normalized according to Value-in-Use (VIU) assessments and observed brand relativities. This includes the brands that currently fall under the assessment for 58% low-alumina iron ore fines CFR China index (IONC580 & TS01047). Going forward, Platts may consider spreads and dynamics in the Chinese portside market as indicative factors to help calibrate VIU adjustments for seaborne 58% iron ore fines assessment as well as changes to brand relativities.

As part of this change, Platts now also reflects the new specification in its 58% iron ore West India netback price (IODFA00). This price continues to be automatically calculated by deducting the assessed freight rate between West coast India and Qingdao for a 50,000 mt (Supramax) iron ore cargo from the 58% Fe iron ore fines CFR China assessment.

Separately, effective October 1, 2020, Platts will discontinue the Platts & TSI IO Fines 58% Fe low-alumina iron ore fines CFR China assessments (IONC580 & TS01047) and respective averages to further consolidate the coverage of the iron ore fines with iron content below 60%. Platts will publish a separate subscriber note on the day of discontinuation to inform market participants of the change.

The affected assessments are published on the fixed page PMA1105 and PMA1106 of the real-time Platts Metals Alert, on page 2 and 6 of the Steel Markets Daily, in the Platts Market Center and in the Platts price database.

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

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