Rio's 20% price cut proposal rejected by CISA

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Friday, 10 April 2009

Rio Tinto, the world's second- largest iron ore producer, offered a temporary 20 percent price cut to Asian steelmakers after annual contract negotiations stalled. But some Chinese mills rejected the discount as too small. Rio's offer falls short of the 40 percent cut that Chinese steelmakers, the world's largest buyers of iron ore, are demanding because of falling steel prices. Annual contract talks may take another four months to settle, a source said.
China is pressing producers to cut 2009 contract prices to below 2007 levels, or at least a 40 percent reduction for imported ores, the CISA president Shan Shanghua said. As of March 27, the landed price of 63.5 percent grade spot iron ore from India has dropped by 57 percent to current $60 to $62 per ton from the late 2007's level of $205 per ton.
Source: CISA