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Iron Ore Index -- IODEX

  • What is IODEX?
  • How we assess the Platts IODEX
  • Evolution of Platts IODEX

What is IODEX?

Platts Iron Ore Index, or IODEX (IODBZ00), is a benchmark assessment of the spot price of physical iron ore. The assessment is based on a standard specification of iron ore fines with 62% iron, 2.25% alumina, 4% silica and 0.09% phosphorus, among other gangue elements.

Since the breakdown of annually negotiated prices in 2010, IODEX has been the primary physical market pricing reference for seaborne iron ore fines delivered into China, the biggest importer of the steelmaking ingredient.

The use of the IODEX has also been extended to price iron ore in the forms of lump, pellet and concentrate, via the application of premiums and discounts to account for quality differences from the base specification.

The assessment is published on a CFR Qingdao basis, but is used by steelmakers, traders and mining companies globally to price long-term and spot contracts.

Ores delivered on quality, location and timing dimensions differing from those underlying the IODEX are normalized using impurity penalty/premia differentials, which are updated to reflect prevailing market values for different impurities.

IODEX and accompanying iron ore price assessments have brought increased transparency to an industry which continues to evolve in terms of the pricing methods it employs, most recently manifest in the forms of floating price deals for physical cargoes, hedged using positions in the financial derivatives market.

The Platts Iron Ore (IODEX) price assessments are available in these services.

For over 10 years, S&P Global Platts has provided robust and independent price assessments for iron ore. This video outlines the key processes that our editorial team undertake when assessing the iron ore market, including the important role of Platts Market-On-Close (MOC) process. For more information email: IODEX@spglobal.com.

How we assess the Platts IODEX

Platts Iron Ore Index assessments reflect the tradeable price of iron ore at 5.30pm Singapore/Beijing time (9.30 am GMT).

The IODEX assessment is not origin specific, and takes into account ores with iron content between 60-63.5% Prior to 2012, the spot market saw Indian material traded most actively; this shifted, with Australia being the main source of spot medium grade fines material.

Platts considers several liquid, widely-traded brands in its assessment of spot market value of medium grade fines delivered into China.

Iron ore is a commodity with widely varying quality specifications. The trade, bid and offer data obtained by Platts are normalized for quality (chemical, physical and metallurgical), delivery timing, location and other terms of trade to the specifications underlying IODEX and associated indexes.

Platts publishes bids, offers, expressions of interest to trade, and confirmed trades during our Market on Close assessment process every day. The information is summarized in our daily newsletters and is published in full on our real-time information service, Platts Metals Alert.

Evolution of Platts IODEX

Platts started assessing the spot price of seaborne iron ore on June 2, 2008 – the first publisher to do so on a daily basis.

Starting with the 62%-Fe IODEX, subsequent associated assessments were launched to reflect ores of different quality groupings and forms, including lump.

IODEX was adopted as the most-used spot price index in 2010, when the annually negotiated pricing mechanism between major mining companies and steelmakers broke down.

Initially used as the basis of long-term contractual pricing, it is now also the basis of floating-price spot deals, and of financial derivatives like swaps.

On January 2, 2018, Platts merged IODEX with The Steel Index Iron Ore Fines 62% Fe CFR China (TS01021) index. The merger of these two price series saw both prices published as the same value each day, following the same methodology and forming a united forward curve for paper contracts.

The merger of these two price series allowed Platts to convert with greater certainty floating price trades, bids and offers to a fixed price basis.

Platts thought leadership has brought about unprecedented transparency in the iron ore market, achieved through active market-testing of data obtained and the publication of a daily spot market commentary with a large following.