Brazilian miner Vale has almost doubled its Q1 2021 direct reduction pellet premium to $46.30/dmt for above 65pc Fe fines, compared with $24/dmt in Q4 2020.
According to media reports, the company also set its blast furnace pellet premium at $40/dmt for above 65pc Fe fines in the first quarter of 2021, twice as much as the Q4 2020 premium of $20/dmt.
Reports suggest that while settlements have been made in Asia and South America, negotiations regarding 65pc Fe pellets are still ongoing in Europe. The premiums are applied to iron ore spot fines prices.
Iron prices continue to trend upward, owing to Vale’s reduced iron ore guidance for 2020, along with the approaching cyclonic season in Australia, one of the largest producers of iron ore, which may lead to supply tightness as well.