Insider learned the latest progress of the negotiation said that the global several mine firms required boosting 10%-25% for ore price next year based on the contract price of this year, which may increase the steel cost in auto, construction, home appliance and other commodity.
China consumed about 65% of global seaborne ore. Presently China is trying to suppress the price of iron ore and coal which are the main raw materials in steel-making.
However, the insider learned the latest progress of the negotiation between steel firms and BHP Billiton, Rio Tinto as well as Vale said that steel demand is rallying and the iron ore supply is tight, which indicated that price is bound to hike.
Both sides may ink agreement in April of 2010 and the iron ore price may boost to U.S.$70-75 per ton. The price of this year was about U.S.$65 per ton.
The price rising on the spot market is beneficial to mining enterprises. BHP Billiton was eager to sell iron ore on spot market. The enthusiasm of Rio Tinto and Vale is not so high, but the counter-emotion is also dropping. Steel manufacturers hope to lock cost by contract price in order to be affected by the price increase.
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