Pellet Price, page-936

I did contact Metal Bulletin (Fastmarkets) to enquire about the differences in the pellet prices between different indexes. The reply was most informative and comprehensive. My hat off to them as I'd mentioned my request was due to the Grange Resolution regarding the offtake agreement and they were very happy to assist.
Whilst I won't publish the entire report I'll give some relevant details.
The index uses a number of different suppliers and countries and this is used to compile the price, as you can see there is a difference between India pellet prices and the likes of Ferro-pro, so the Index value lags  as
" gaps between the higher-impurity Indian-origin pellets and the higher-quality brands like Ferrexpo’s FPP and Vale’s AF11 have widened considerably."

Grange's price should be similar to Ferro-pro but I'm told that Grange hasn't been in the spot market for ages.
This obviously means that everything that Grange produces is sold and no other pellets are available for the spot market.



As you can see from the prices and compare with Custeel you can note a slight discount but it seems to catch up.



I'm told that the new Fastmarkets pellet price index which started on the 7th May should more closely reflect the current market.

"It would also align Grange’s price realization more closely with that of the biggest tier-one pellet majors such as Vale.

I hope this explanation at least helps shed some light on the historical price discrepancy between the mechanisms Grange applies, and how our new pellet premium index development may offer a more appropriate solution for Grange to adopt going forward."

I find it most useful to get information direct from the source.
I'll be voting YES, as I believe Grange management are doing their best  to get the highest price  possible.