Ore grade and iron ore (62 % Fe index)
Grade is the share of valuable metal in an ore – % Fe for iron, % Cu for copper concentrate, g/t for gold. Iron ore prices are set against the Platts/Fastmarkets “62 % Fe fines CFR China” index: 65 % Fe high-grade concentrate and pellets sell at a premium and 58 % Fe low grade at a discount. Pricing also applies penalty or premium scales for silica, alumina, phosphorus, sulphur and moisture. For concentrates, treatment and refining charges (TC/RC) and penalties for deleterious elements such as arsenic and mercury are negotiated as well.
Related terms
Price reporting agencies (Platts, Argus, ICIS, Fastmarkets) PRA
Independent organisations that collect deals, bids, offers and market talk for commodities not traded on exchanges – or whose physical markets differ from exchange prices – and publish daily or weekly assessed prices. S&P Global Platts and Argus are benchmarks for oil, LNG, fertilisers and coal; ICIS and ChemOrbis for petrochemicals and plastics; Fastmarkets (Metal Bulletin) for metals, ores and paper; CRU for steel and aluminium. Their prices serve as indices in formula-priced contracts and are audited against IOSCO principles.
Umpire analysis
Analysis of the retained sealed sample by an independent laboratory agreed in advance, used when the seller’s and buyer’s results differ by more than the splitting limit set in the contract. It is common in ore and concentrate trade; the umpire result is usually binding, or is averaged with whichever party’s result is closer. The cost is normally borne by the party whose result is further from the umpire’s.
Bulk cargo (dry and liquid bulk)
Cargo loaded directly into a ship’s hold or tanks without packaging: grain, coal, iron ore, scrap, fertiliser and cement are dry bulk; crude oil, fuels, vegetable oils and chemicals are liquid bulk. Ship sizes are classed as Handysize (15–35k dwt), Supramax/Ultramax (50–64k), Panamax/Kamsarmax (65–82k) and Capesize (over 100k dwt). Quantity is determined by draft survey or weighbridge and quality by sampling at loading and discharge.