Anglo-Australian mining firm Rio Tinto has used the Argus ICX 62pc Fe iron ore index for the first time in a spot sale.
The producer today sold a cargo of its flagship PB Fines product at a $1.5 premium to the April average of the Argus ICX 62pc Fe index and the Fast Markets MB62pc Fe index. The trade took place over the Corex trading platform.
PB Fines is Rio Tinto's main blended fines product, which serves as a defacto benchmark product for the 62pc Fe iron ore segment. Its consistent mainstream specification makes it the mainstay of furnaces across China and beyond, and it remains one of the most liquid spot market products. The ICX specification closely matches PB Fines' typical specification.
This sale is the first usage of Argus ICX by Rio Tinto and makes it the second major producer this month to use Argus as part of its spot sales strategy. Rio has previously used Platts' IODEX almost exclusively for contract and spot business. S&P Global Platts competes with Argus in providing price information.
This marks a trend of producers looking to diversify the range of indices against which they settle. On 1 November last year, Australian rival BHP sold a shipment of its Newman High Grade Fines (NHGF) product against the December average of the Argus ICX. NHGF was also previously exclusively sold against IODEX.
The spot sale also marks a change in approach for Rio Tinto, in that it is the first time a cargo has been sold off an average of more than one index — known as a "basket".
Consumers in China — through industry bodies such as the China Iron & Steel Association (Cisa) — have long campaigned for greater index choice through so-called "basket" pricing. Cisa went as far as to publicly request that its member mills refuse to sign offtake agreements based on a single index in September. Producers have in the past year responded through offering greater choice.
Brazilian mining firm Vale has long used a range of different index providers to price its products. BRBF, the other mainstay medium-grade fines product being used in blast furnaces, is increasingly being sold off a range of low alumina indices. BRBF remains a key medium grade fines product captured in the ICX index, but has not yet traded against it.
Argus has published a value-in-market driven brand price for BRBF since October last year.