Platts proposes to launch 67% Fe iron ore pellet feed CFR Middle East assessment

Platts, part of S&P Global Commodity Insights, is proposing to launch a daily 67% Fe iron ore pellet feed spot price assessment on a CFR Middle East basis, effective Sept. 16.

This proposal is in response to growing interest from market participants in pellet feed and pellet products for the Middle East region, given the focus on developments around high-grade pellets, direct reduced iron (DRI) and hot-briquetted iron (HBI) markets in the region.

High-grade, low-impurities iron ore pellet feed is a key raw material in the production of direct-reduced grade pellet, which is in turn one of the key feedstocks for DRI. DRI produced using low-carbon or renewable fuels is crucial in producing high quality steel products and reducing the carbon footprint in the steelmaking process.

The Middle East is expected to become major trading hub for such high-grade pellet and its feedstock amid growing interest in steel decarbonization and the announcements of several pellet and DRI projects in the region.

The proposed assessment would have the following specifications:

The proposed assessment would consider market information reported to Platts and published throughout the day, including firm bids and offers, transactions and indications, as well as any other data deemed relevant to the assessment process. The assessment would reflect daily spot trading activity in seaborne high-grade pellet feed delivered to the Middle Eastern region.

Other than such market activity, Platts may also consider seaborne pellet feed imports into China meeting the specifications, by assessing the netback value to their original load ports, and then deriving a net forward value by adding the relevant freight rate to the Middle East. Freight rate information reported by market participants will be published as 'heards' for wider market testing.

The assessment would reflect a 5.30pm Singapore timestamp and follow the Singapore holiday calendar.

Platts iron ore specifications guide can be found here: https://www.spglobal.com/commodityinsights/en/our-methodology/methodology-specifications/metals/iron-ore-methodology

The daily assessments and associated monthly averages would be published on the real-time Platts Steel Alert and Platts Metals Alert, in SBB Steel Markets Daily and in the Platts price database.

Platts invites feedback on this proposal to iodex@spglobal.com and pricegroup@spglobal.com by Aug. 30.

For written comments, please provide a 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.