Vale debuts new 65.36pc Fe low-alumina SFLA: Update
Adds tender result, trade details in paragraphs 3-4
Singapore, 17 July (Argus) — Brazilian mining firm Vale is increasing the Fe content of its sinter fines supplied to China, with the aim of achieving higher premiums than for competing Australian 62pc mainstream fines.
Vale today issued its first tender for the new Sinter Feed Low Alumina (SFLA) brand, with Fe content well above the 62pc range expected. The 175,217t cargo with 9 July bill of lading has a loading port quality of 65.36pc Fe, 4.82pc silica, 0.53pc alumina, 0.036pc phosphorus and loss on ignition of 0.75pc.
That Fe content is in line with the 65pc category in which 65pc IOCJ trades, and well above the 62pc category that tracks closely to 61.5pc PB fines and 63pc Newman fines. Buyers were asked to bid on a fixed price or indexed to a 62pc index, not a 65pc index. The tender, for loading in Tubarao, Brazil, closed at $75/t.
The SFLA silica level is lower than the expected 6-7pc. Spot penalties for silica have spiked this year, widening discounts for 62pc fines with higher silica levels to PB and Newman fines. IOCJ, an established brand with silica below 2pc, traded at a premium to SFLA at $84.25/t on the Corex platform.
Vale iron ore marketing director Luiz Meriz previewed the launch of SFLA at the SGX Iron Ore week in Singapore late April. Market participants today said Vale expects to ship 1mn t/month of the new product.
Long-term contract buyers of Vale's 62.3pc Fe BRBF blend have been told the BRBF's Fe specification will increase to 63pc.
"Vale will upgrade its BRBF specification by increasing Fe content to 63pc from end July to early August laycans. All the cargoes after that will be 63pc," said a trader at a mill in Hebei. "I think with this move Vale intends to fight against popular PB fines and Newman fines from the other two majors."
Vale's move to increase the Fe content of BRBF reverses its 2017 specification update that lowered BRBF's typical Fe to 62.3pc, as well as 6pc silica, 1.6pc alumina and 0.07pc phosphorus, from a 2016 typical 62.5pc Fe, 5.2pc silica, 1.8pc alumina and 0.07pc phosphorus.
The new BRBF specification will have silica content of around 5pc and alumina around 1.5pc, the trader said.
"The 63pc Fe should be welcomed by the market, and push up the floating premium of BRBF for laycans after the end of July," the trader said.
Vale could not be reached for comment.