FOCUS: Transparency in iron ore pellet market picks up on greener steel

Chinese steelmakers’ changing appetites for high-quality iron-ore blast furnace pellets prompted further developments in the transparency and maturity of the pellet segment, Fastmarkets understands.

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...

Published

Paul Lim

Alex Theo

June 05, 2020

10:45 GMT

Singapore