The recent drop in iron ore prices amid improvements in Brazilian and Australian supply and a weak global steel market have led to buyers renegotiating the premium they had agreed with Brazil’s Vale under annual contracts for pellet shipments to be made in the last three months of this year, Fastmarkets has learnt.
These premiums are paid on top of an index for 65% Fe iron ore fines, such as Fastmarkets’ index for iron ore 65% Fe Brazil-origin fines, cfr Qingdao
This index averaged $99.17 per tonne in August, up 4.7% from $94.65 per tonne a year earlier, but 22.5% lower than $128.09 per tonne in July.
At the time of writing, the index’s month-to-date average was $98.70 per tonne.
In contrast, the index averaged just $89.65 per tonne in January, when a tailings dam breach at one of Vale’s mining operations...