SUBSCRIBER NOTE: TSI proposes spec change to 62% CFR Tianjin iron ore index

Following market feedback, The Steel Index (TSI) proposes a refinement to the recently proposed specification change to make its Chinese iron ore imports index for 62% Fe fines, CFR Tianjin port, more closely reflect the specifications of the spot market's most liquid products. Please find below details of the current and proposed specifications.

Current Proposed Fe 62% 62% Moisture 8% 8% Alumina 3.50% 2.25% Silica 4% 4% Phosphorous 0.07% 0.09% Sulfur 0.05% 0.02% Min. lot size 20,000 t 50,000 t Delivery port Tianjin Qingdao

This refinement to the proposal -- published September 29, 2016 -- relates to silica and sulfur impurity levels. TSI is now proposing to leave silica levels unchanged at 4%, rather than increase the index's silica base specification to 4.5%. In addition, TSI is now proposing to reduce the sulfur level to 0.02% from 0.05% for the index's base specification. The proposed change in CFR basis ports from Tianjin to Qingdao remains. The proposal to change the specification follows consistent feedback from market participants across the supply chain, who have requested closer alignment between the specifications of the most liquid iron ore brands and TSI's 62% Fe index specification. Under this proposal TSI plans to introduce the specification change effective January 1, 2018. TSI recognizes that the index price has use in contract negotiation, physical and financial settlement, and/or royalty payments and therefore extends a period of market consultation and feedback until December 27, 2016, before a final decision is made. If you wish to provide any comments or feedback regarding this proposal, please send them to feedback@thesteelindex.com. TSI will consider all comments received. Please mark your comments as "confidential" unless you are agreeable to them being made publicly available on request.