bhp know - world steel demand to grow in 2010, page-6

I will be a buyer at 1.40 not a seller,


In terms of companies, the Australian Financial Review has reported that BHP Billiton and Rio Tinto are speculated to be in iron supply discussions with JSW Steel and several other firms. These speculated talks come as the China Iron & Steel Association begins its annual farce of a negotiation process in Qingdao tomorrow and as Rio's imprisoned executive Stern Hu faces another possible delay in a trial for the alleged theft of commercial secrets. India is also keen on coal and there are plenty of deals, announced and rumoured, in the works with Australian suppliers.

But back to iron, it is interesting to speculate on where some of the possible offtake could end up if BHP does end up bidding $220 million for United Minerals, as The Australian reports this morning. United, which is still in a trading suspension and has not announced any deal, would be a useful bolt-on to either BHP or Rio in the Pilbara district. As for Chinese offtake, The Australianhas also speculated about the fate of Fortescue Metals Group's sales arrangement with the China Iron & Steel Association and Baosteel, negotiated earlier this year to great acclaim as Rio and BHP were meanwhile facing a pricing impasse. That sales deal was contingent upon Fortescue gaining between $US5.5 billion and $US6 billion in debt finance from China. That finance, of course, has failed to materialise, but nobody's saying anything about the iron ore sales. At the very least, Fortescue's expansion won't be nearly as ambitious without the extra funding. Andrew Forrest's company will instead finance increased production from cash and future cash-flow.


http://www.businessspectator.com.au/bs.nsf/Article/Morgan-Stanley-Investa-Property-Group-AXA-Macquari-pd20091013-WRS66?OpenDocument