The change will be applied retrospectively to all shipments made since April 1, the company said on Monday November 19.
On November 16, the Metal Bulletin iron ore pellet price for 65-66% Fe stood at $145-149 per dry metric tonne cfr China.
Under the revised agreement, Shagang’s offtake tonnage from Grange’s Savage River production site in Tasmania will be 1 million tpy of iron ore pellets.
“The agreement will put Grange in a strong position to facilitate the further development of key relationships with major iron ore buyers,” md Richard Mehan said.
“We have a significant cornerstone contract, at market prices, with Shagang – a major Chinese steel producer – and the ability to diversify our customer base for products that are sought-after in Asian markets, as well as to retain some flexibility to sell into spot price markets,” he added.
In March 2011, Grange revised its annual contracts to a quarterly and monthly basis, shortening contract durations to reflect market prices more accurately.