Iron ore price negotiations - China to fix benchmark price

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Monday, 04 May 2009

China View quoted Mr Luo Bingsheng deputy chairman of China Steel Industry Association as saying that China has no intention of giving up the initial pricing power of the ongoing iron ore price negotiations. Mr Luo said "If the iron ore price was in line with our requirements, we would accept it. If others' agreements are not in line with our requirements, we will stick to our own claim.”
He said various miners and steel producers had come to the agreement that the global steel industry would generally see an over-supply this year, so miners should cut iron ore prices for the 2009 annual deal, but there was no agreement on the scale of the cuts.”
In the similar development, Mr Michael Zhu Vale's China president, said Tuesday at an industry conference in Beijing that the Brazilian mining giant would cut iron ore output by 25% this year.
The 65% price rise of iron ore agreed last February between Japanese, ROK steelmakers and leading Brazilian iron ore supplier Vale set the 2008 benchmark price.
China's leading steelmaker Baosteel in December 2006 beat other buyers in setting the iron ore price for fiscal 2007 with a slight9.5% price rise. The lower-than-expected increase was deemed a success for Chinese buyers.
Source: China View