September 13, 2017 / 9:47 AM / in 10 months

China's Dalian Exchange adjusts high-grade iron ore delivery standard

BEIJING (Reuters) - China’s Dalian Commodity Exchange (DCE) said on Wednesday it will adjust the quality standards for deliveries of iron ore in order to meet market demand for high-grade ore.

The new standards lower the allowable amount of sulfur, lead, zinc and arsenic in the 62 percent iron ore deliverable under the iron futures contracts on DCE, according to a statement on the exchange website.

The bourse also declared a premium of 1 yuan ($0.1531) per tonne for deliveries of iron ore with iron content higher than 62 percent and a 1.5 yuan per tonne discount for deliveries below that threshold.

The new standards will be effective starting with the September 2018 iron ore futures contract.

In August, the DCE issued a statement saying it wanted to attract more standardized iron ore for delivery.

China’s intense anti-pollution campaign, which has shuttered hundreds of steel plants producing low-quality products, has prompted mills to use more high-grade iron ore.

The higher quality ore produces more steel for each tonne that is processed and reduces emissions as less coke is used during smelting.

Strong demand has driven the spot price of iron ore with 62 percent iron content higher. Prices have climbed 43 percent from the middle of June to $76.37 a tonne on Tuesday, according to Metal Bulletin.

Reporting by Muyu Xu in Beijing and Manolo Serapio Jr in Manila, Editing by Christian Schmollinger

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