Metals: ARGUS iron ore price assessments

Metals: ARGUS iron ore price assessments

The ARGUS iron ore price assessments

Argus offers a comprehensive suite of iron ore assessments across fines and lump, seaborne and portside prices. Its two references for 62pc Fe iron ore, ICX and PCX, are benchmark indicators of the price of medium-grade iron ore fines imported to China and traded at Chinese ports, respectively. The ICX is an option for index-linked trade on both the Corex and Globalore platforms.

Argus is at the forefront of pioneering the highest levels of transparency in the index price-formation process, which has become increasingly important as the pricing system evolves. The ICX benchmark is published with a daily written rationale, as well as the industry’s first quantitative rationale, outlining exactly how much data, and of what type, went into the index, as well as how that data was weighted.

Argus’ reliable and robust price assessments are coupled with industry-leading news, monthly and quarterly market analysis and a unique monthly index data audit. This is supplemented by a downloadable Excel database of iron ore spot deals, bids and offers in an easy-to-use format, with granularity around each data point.

Prices and news are delivered daily online through the Argus Metals platform and through the flagship Argus Ferrous Markets report, which offers a holistic view of global ferrous markets. For the Asia-based market observer Argus also produces the Ferrous Midday intra-day update and the Ferrous Bulletin end-of-day Asia market wrap.

Advantages of the ARGUS iron ore price assessments

Argus compiles iron ore assessments using volume-weighted averages of spot market activity across the entire day. Quality and timing normalisation, as well as the use of financial forward curves to integrate floating price deals, are used to ensure the broadest possible data set for each day’s index. The data are weighted according to a data hierarchy, placing the greatest emphasis on concluded transactions. The integration of trading screen and futures data ensures that this methodology is ideally suited to serve the modern iron ore marketplace.

As well as indexes reflecting a broad range of related products, Argus publishes quality-driven brand prices for a number of mainstream fines and lump grades. These are calculated using quality adjustments for iron content and impurities. The advantage of this approach is that each brand price is based on the entire market data set — not simply that product. This enables each brand price to be published, irrespective of liquidity.

Argus has monitored Chinese port stock prices longer than any international price reporting agency, with its PCX™ index, the price for 62pc Fe fines fot Qingdao port, reflecting the average value of stocks at Qingdao port going back to 2013. Argus has a unique approach to illiquid seaborne spot markets, such as those for lower-grade ores of 56.7pc Fe, which converts prices in Chinese yuan/wet tonne to a seaborne equivalent price in US dollars/dry tonne.

Users of the ARGUS iron ore price assessments

Some of the world’s largest iron ore mining companies and trading firms reference the ICX in supply contracts. A number of electronic trading screens, including the widely used Globalore and Corex platforms, provide the ICX as an option for use in index-linked spot transactions.

Further downstream, Argus’ indicative steelmaking costs and mill margins, which include the iron ore price assessments, provide manufacturers that source material from a steel mill with a view of steelmaking raw material costs and potential margins.

Iron ore steel smelting


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