SUBSCRIBER NOTE: Platts clarifies terms reflected in iron ore MOC assessment process

S&P Global Platts wishes to clarify the contractual terms that it reflects in the Market on Close assessment process for iron ore cargoes.

Platts seeks to reflect common market practice in its MOC assessment process.

Platts has observed that brands of iron ore are typically sold against the standard spot contract terms of the mining company producing and marketing the brand or against base contracts that do not differ materially from the miner's spot contract terms.

Platts does understand that some companies consistently use contractual terms other than those listed above with other, specific counterparties.

For transactions resulting from a bid or offer reported via the MOC assessment process a company may request to use terms other than those described above. Platts would, however, not consider it unreasonable if their counterparty refused this request if these terms differ materially from those commonly used in trade between the two companies.

More broadly, Platts publishes transactions, bids and offers in its MOC assessment process that reflect the standard trading terms agreed between different market participants.

For instance, if companies commonly trade outside of the MOC using a letter of indemnity, Platts would consider it reasonable for those two companies to transact using an LOI for trades concluded in the MOC.

Platts observes that trading against an LOI is a typical market practice in iron ore. Platts does not reflect cargoes offered against original bill of lading (OBL) discharge in its MOC assessment process.

Platts considers the above terms as common market practice. Platts continues to track terms used in iron ore trade and may update this list according to market developments. In all circumstances, Platts reverts back to reflecting common market practice.

Please send any comments, questions or feedback to IODEX@spglobal.com and copy pricemethodology@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.