Singapore — Cargill sold its first cargo of iron ore to a Chinese steel mill via a cloud-based electronic trading platform this week as part of a move to streamline the transaction process, the trading house told S&P Global Platts.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
The cargo was understood to be 170,000 mt of Pilbara Blend fines sold basis Platts 62% Fe IODEX, and follows a similar transaction between Rio Tinto and Cargill in May, which was also priced off Platts.
Cargill said the transaction "from acceptance to key commercial terms through to delivery" was carried out on Stockholm-based Chinsay's Intelligent Contract Platform.
The trading company said using e-contracts allowed it to cut the transaction time from several weeks to just one day, while removing the need to re-key data and avoiding lost paperwork.
Lee Kirk, managing director of Cargill's metals business, told Platts by email that the company would try to identify more ways of improving the trade process for its global customers. He said China's steel industry was upgrading and adopting new technologies, so Cargill would look to do more e-contract transactions.
"We can't speak on behalf of Chinese steel mills but as a fairly new concept, e-contracts are a great first step and we remain committed to working with our partners to drive the modernization of the industry," Kirk said.
"As digitalization gains traction across various industries, we can expect many Chinese steel mills in the future to adopt new technologies and approaches that will increase the efficiency of the trade process," he added.
Iron ore exporters have been using other technologies to improve efficiencies, such as electronic bills of lading, which also cut out paperwork, Platts notes.
China imported 970.7 million mt of iron ore over January-November, according to China Customs, ensuring it will import more than 1 billion mt for the full year for the fourth consecutive year.
-- Analyst Crystal Hao, firstname.lastname@example.org
-- Edited by Wendy Wells, email@example.com