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

Platts, part of S&P Global Commodity Insights, will begin publishing a daily 67% Fe iron ore pellet feed spot price assessment on a CFR Middle East basis, effective Sept. 16, 2024.

The launch is in response to growing interest from market participants in pellet feed and pellet price information in the Middle East, given developments around high-grade pellet, 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 seen as a key route toward reducing the carbon footprint in the steelmaking process.

The Middle East is poised to become a major production and trading hub for such high-grade pellet and its feedstocks amid growing interest in steel decarbonization and has seen the announcements of several pellet and DRI projects in the region.

The assessment will have the following specifications:

The assessment will 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 will reflect daily spot trading activity in seaborne high-grade pellet feed delivered to the Middle East.

Other than such market activity, Platts may also consider seaborne pellet feed imports into China meeting the stated 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. Based on initial data collected by Platts, normalization for CFR China pellet feed may include the following: differential to Platts iron ore fines 65% Fe derivative assessments, VIU adjustment from 65% to 67% Fe and quality adjustments where applicable. Freight rate, differential and adjustment information reported by market participants will be published as real-time headlines, or heards, for wider market testing.

The assessment will reflect a 5.30 pm Singapore (0930 GMT) timestamp and follow the Singapore holiday calendar.

Platts initially proposed the launch in a subscriber note published Aug. 19 available at: https://www.spglobal.com/commodityinsights/en/our-methodology/subscriber-notes/081924-platts-proposes-to-launch-67-fe-iron-ore-pellet-feed-cfr-middle-east-assessment.

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 assessment and associated monthly average will be published on the real-time Platts Steel Alert and Platts Metals Alert, in SBB Steel Markets Daily and in the Platts price database. The assessment will be included on pages STL1600 and PMA1600, and the monthly average on pages STL1601 and PMA1601.

The first monthly average calculations will update on Nov. 1, reflecting the average of daily assessments published throughout October.

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

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.