On December 5, Australia's Pilbara-based miner Fortescue Metals Ltd announced that it has suspended all of its long-term CFR shipping contracts in response to unforeseen market conditions requiring greater FOB sales.
According to its statement, the company will now be responsible for sending one third of its shipments to China, down from two thirds. The alteration will not affect marketing or volumes of iron ore shipping from its iron ore operations in the Pilbara region.
With its CFR sales Fortescue supplied its products on a landed basis into China, whereas with FOB sales customers arrange their own freight from Port Hedland in Western Australia.