Rio Tinto will terminate the contract if the ore price can not reach an agreement
May 6 MetalBiz--Rio Tinto, one of three giant iron ore manufacturers, said that it will terminate the contract if the iron ore price can not reach an agreement as soon as possible. Shan Shanghua, secretary of CISA pointed out the opposite party is in psychological war and this trick can not be effective, as well as the current iron ore spot price has been lower than the requirements of China.
It is understood that China Iron and Steel Association (CISA) participates and guides the iron ore price negotiation all the time this year, and Australia Rio Tinto is the one of the three negotiators. Last year, Australia also threatened to terminate the contract. At the moment, steel enterprises and mines are on the deadlock about the iron ore price reduction, and a 40% price cut over 2008's is Chinese parties’ attitude, but Rio Tinto does not agree.
Rio Tinto iron ore business principle said to analyst that it will stop the contract, if the price can not reach an agreement before June 3. In this regard, Shan Shanghua said, this trick can not play a role this year and it is useless. Also, he expressed that China can not import iron ore for two months, but Rio Tinto can not stop production or give up China market for two months.
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