The authority approaching to iron ore negotiation told reporters that the price rising of iron ore must be more than 40% which is just a minimum requirement. The goal of three miners is clear, that is, long-term contract ore price is line with the spot ore price.
The aforesaid authority said if the iron ore price of 2010 rises 40%, it will be higher 3% than the price of 2008, if soars 50%, the price will be higher 13% than that in 2008. From the perspective of present state, increases of 40% is hard to meet the appetite of miners, so the long-term contract price of 2010 may set historically record high.
Well-informed personnel revealed that in the long-term ore supply contract between BHP Billiton, one of the ore giants and domestic several steel mills, the former asked to issue letter of credit with an increase of 40% based on the interim price of last year, if not, it will cancel long-term ore contract.
Industry insiders believed that according to U.S.$60 per ton (FO
of Australian long-term contract ore, the price is U.S.$84 per ton under an increase of 40%, U.S.$102 per ton if rises 70%. There are still some gaps between domestic spot ore price including sea freight and related fees. CEO of BHP has been stressed the iron ore market price as it has huge price differences and rich profit with long-term contract ore.
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