Rio, Fortescue Change Benchmark Used for China Iron Ore Pricing

Rio Tinto Group and Fortescue Ltd, two of the world’s largest iron ore producers, have switched the index they use to price shipments for the world’s largest commodities consumer, a rare change that follows public criticism of the current mechanism from state-backed buyer China Mineral Resources Group.

Both Rio and Fortescue will stop using S&P Global Energy Platts Iron Ore Index — the industry’s seaborne benchmark — for term contracts, according to people familiar with the matter, who cited a notice given to steel mills affiliated with CMRG. They asked not to be named as they are not authorized to speak to the media.