The iron ore pellet segment has long been touted as the hardest to commoditize, primarily due to differences in product valuations between different global steelmaking hubs, sources said. Most term contracts between buyers and sellers, therefore, used to be settled annually, before evolving to a quarterly negotiation
about a year ago.
“Pellets are a specialized, often tailored, steelmaking feedstock, with a wide range of physical and chemical specifications. Buyer valuation can vary according to regional steel industry characteristics, environmental regulations and sourcing flexibility,” Fastmarkets index manager Peter Hannah said.
The structural shift toward cleaner and greener steelmaking, however, prompted coastal mills - particularly in China - to increasingly seek out high-quality iron ore pellets on a spot basis. The increased spot availability of such products due to subdued demand from more...