Mysteel and Argus partner on iron ore benchmarks

Mysteel and Argus, a global energy and commodity price reporting agency, today signed a memorandum of understanding to publish official index averages for 61% and 62% Fe (iron) seaborne iron ore imported into China.

In recent years buyers and sellers in the iron ore market have chosen to price against informal 'baskets' (averages) of prices from several pricing sources, particularly for sales into China. The industry already regularly uses a monthly average of assessments separately published by Mysteel and Argus for ore containing 62% iron in spot and term contract markets, informally referred to as AM62. Based on requests from market participants, Mysteel and Argus will formally publish the AM62 average in a monthly Mysteel/Argus service.

The service will also include AM61 - a monthly average of new assessments for 61% Fe iron ore prices from each party. The 61% Fe specification more closely reflects the grade of Australian iron ore exported to China, which results from grade depletion at mining operations in Western Australia over a number of years.

Zhu Junhong, Chairman and Founder of Mysteel, said: "We are delighted to marry our expertise and deep understanding of the Chinese market with Argus which is an established international price reporting agency with decades of expertise serving a global customer base. It reflects the needs of the widest range of iron ore and steel market participants both internationally and in China."

Argus Media chairman and chief executive Adrian Binks said: "We're delighted to be able to partner with Mysteel, China's largest and most respected provider of pricing and data to the ferrous sector. Market participants have been pushing both for a greater range of index averages and for new references for 61% Fe, since these will better reflect the market. So we have agreed together to provide both in a single new service. This offers greater optionality for the iron ore market as it looks for new index-linking and risk-management solutions in response to a decline in average grades."

The new AM61 and AM62 prices will be published monthly as an average of Mysteel and Argus assessments for 61% and 62% Fe iron ore on a delivered to Qingdao basis, calculated on the final Singapore working day of each month. Mysteel and Argus will continue to publish their own separate assessments for 61% and 62% Fe iron ore.