Iron Ore

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METHODOLOGY AND SPECIFICATIONS GUIDE

Iron Ore

(Latest Update: May 2013)

PLatts MethodoLogy gUides assessMent PrinciPLes
ConvergenCe with market value transaCtion-based normalization / effeCtive priCing time sensitive assessment transparenCy market on Close verifiCation of data spreads data Codes

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iron ore assessMents
iodbz00 iodeX 62% fe Cfr China iodsC00 io fines 63.5/63% fe Cfr China ioprm00 io fines 65% fe Cfr China iodfe00 io fines fe 58% Cfr China ionC520 io fines fe 52% Cfr China ioClp00 io spot lump premium 62.5% Cfr China (weekly) ioplC00 io australia lump premium ContraCt priCe Cfr China (Quarterly) freight assessments & fob netbaCks freight differentials for ports in China iron ore paper swaps

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generaL terMs and conditions
gt&Cs time of assessment Quality priCe units Credit/payment terms Quantity / order size timing embedded options loading / delivery loCation freight differentials

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MetaLLUrgicaL coaL assessMents aPPendix i: overview of Market on cLose assessMent market on Close: platts assessment proCess

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aPPendix ii: Market on cLose ProcedUres
bids/offers eXeCutability performanCe inCrementability repeatability nomination proCedures

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norMaLization ProcedUres
Quality Quantity / order size timing

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METHODOLOGY AND SPECIFICATIONS GUIDE

IRON ORE

Platts methodology guides
platts publishes a methodology guide for each of the markets in which it produces price assessments. the guides are intended to provide market participants with general and specific criteria that underpin platts assessments. methodology guides are updated periodically to reflect changes in the market and in trading practice. platts engages with market participants and values feedback on any aspect of its assessment methodology. platts recognizes that markets are constantly evolving and it seeks to ensure that its assessments keep in step with evolving market requirements. Changes to the methodology and/or specifications are typically advised in subscriber notes published on the platts website www.platts.com and in its electronic and print publications. such changes are subsequently incorporated in periodic updates to the methodology guides. each guide is dated and bears an issue number for reference purposes. platts is completely impartial and independent in its role as a market observer, and welcomes dialogue with all sides of the market including sellers, buyers and any intermediaries. for any questions or comments relating to platts steel, ferrous scrap and iron ore assessment methodology please contact the director of market reporting, metals – email: francis_browne@platts.com. tel: +44 (0) 20 7176 6239.

platts monitors activity throughout the day and uses the information gathered in its assessments. it should be noted, however, that platts assessments do not reflect an average of the deals reported over the day. in general, volume-weighted averages can be distorted by the pattern of trading over the day, the parameters of individual deals submitted for assessment, and by statistical aberrations relating to sample size, for instance if there is a lack of disclosure of all deals done over a particular day.

normalization / effective Pricing
markets can be heterogeneous in nature, and transactable values are determined by many factors including the quality and chemical specification of materials, the size of the order, timing and delivery terms, and options held by the seller or buyer relating to the deal parameters. the iron ore industry also defines a base price around the fe content of the ore and differentiates value accordingly. platts where possible seeks to align its assessment processes with industry practice. platts takes bid, offer and deal information and relates these to the base standard reflected in its assessments. these base standards are defined under each...
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