It is reported that China five major metallurgical enterprises settled agreement with BHP Billiton, Rio Tinto and Vale on increasing iron ore price. According to this agreement, the ore price to China’s ports will rise from U.S. $62 per ton in 2009 to U.S. $84 per ton, a rising of 40%.
It seems to mean that the annual ore negotiation has achieved preliminary result. At least, there is a pricing standard. And the reporter learned from several domestic steel mills that presently the annual ore negotiation is still ongoing, while steelmakers and three ore miners both price temporarily and differently as China had not reached long-term price agreement with three miners last year.
"The iron ore negotiation is still ongoing led by Baosteel, and it is unlikely that three ore mining enterprises all agree the increase of 40%”, a senior executive from a steel enterprise with the steel production ranking top 10 in domestic market.
The aforesaid insider said compared with large-scaled steel enterprises, small and medium-sized firms are difficult to obtain long-term agreement ore, so the latter is easier to accept the temporary price proposed by mining enterprises as to exchange the guarantee of long-term agreement ore. After all, if mills purchase ore from spot market, the price will be higher over 40% than the initial price of Japan-S.Korea enterprises.
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