Iron ore pricing negotiations for 2010 set to start
China lists its "wants" for supply contracts
Tom Stundza -- Purchasing, 10/21/2009 12:45:33 PM
China wants to set iron ore prices from January 1 and separately from the rest of the world to exercise its bargaining power as the largest buyer of the steelmaking ingredient, according to Shan Shanghua, secretary general of the China Iron & Steel Association (CISA).
Shan is the steel industry executive who ignored the wishes of Baosteel Group and other large steelmakers, who wanted and eventually did settle last year's contracts at a 33% discount from 2008 contracts. That was the deal offered to Japanese and Korean mills by Rio Tinto Group and BHP Billiton. Instead, he insisted on a 40% price discount for a group of smaller mills that never was finalized.
CISA has forecast China steel output exceeding 500 million metric tons in 2009 and sees a 10% increase in 2010. Bloomberg reports from a news conference in Qingdao that CISA again plans to represent Chinese mills in price talks. Since China could account for 60% of global seaborne iron ore trade, Shan says, the country wants all purchases to be on long- term contracts rather than on spot deliveries.
As previously reported, BHP Billiton, Rio Tinto and Brazil's Vale ended up selling iron ore this year into Asia, including China, through a mix of annual and quarterly contracts, cash and indexed pricing, breaking with a 40-year tradition of 100% annual contracts.
Iron ore miners want a 5% hike in prices
02/25/2009Iron ore contract set
05/16/2006China still holding Australian iron ore exec
10/11/2009
Now Playing: 
