The hanging iron ore negotiation just likes a dark cloud on the head of China’ s steel industry, but the market focus has not weakened. Recently news spread that China’ s steelmakers and oversea mining enterprises reached interim price agreement, the iron ore sales price to China’ s ports climbed 35% compared with 2009, from U.S.$62 per ton to U.S.$84 per ton. The new release caused the steel to weak generally on Feb.23 and more than two-thirds of shares ended with drops.
Foreign media reported that China’ s five major metallurgical enterprises inked interim price agreement with BHP Billiton, Rio Tinto and Vale, which increased iron ore price, that is, the iron ore sales price to China’ s ports will lift from U.S.$62 per ton last year to U.S.$84 per ton, an increase of 35%.
Analyst pointed out that on one hand, previously the long-term contract price inked by China’ s steel enterprises and miners was both FOB price, the CIF and FOB price has difference of sea freight and the so-called CIF price has no probability, on the other hand, the current price cannot referred as interim price.
Although the 35% price increase of iron ore has not recognized by domestics including steel enterprises, personages of all circles stated the controlled state of China’ s steel industry by oversea mining enterprises has not presented any changes and the negotiation of iron ore is still tough this year. The increase rate may not lower than 35%.
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