Iron ore prices in question as talks begin
By Tom Stundza -- Purchasing, 11/8/2006 2:53:00 PM
Iron ore prices may rise, fall or stay the same in fiscal 2007 starting next April; it all depends who’s being interviewed.
Luo Bingsheng, vice chairman of the China Iron and Steel Association, thinks iron ore prices could stabilize or maybe even decline next year as supplies improve. Geoffrey Cheng, Hong Kong-based analyst with Daiwa Institute of Research, writes that a 5% increase is probable because of projected increased demand. The Australian offices of the Credit Suisse, National Australia Bank and Goldman Sachs JBWere brokerages all are forecasting 10% increases because of expected tight supply. In an interview with Bloomberg News Service, Luo Bingsheng says China's biggest steel mills are opening annual contract talks with global miners BHP Billiton, Rio Tinto Group and Brazil's Companhia Vale do Rio Doce holding a no-increase posture in what has become a test of China’s ability to influence world commodity prices. Iron ore prices (for the grain-like material called fines) increased by 19% in fiscal 2006 after increasing 71.5% in fiscal 2005, 18.6% in fiscal 2005 and 10% in fiscal 2003.
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