slight turn, page-8

the wheels are indeed turning. Yes, the Chinese will now have no other choice than to accept the 19% iron ore price increase, or so it would seem from the latest international press releases (read below) overnight. An announcement to this effect is now imminent and just watch the mid-cap iron ore producers/players like MGX take off with a bullet accordingly. This will obviously be the last chance for savvy investors to buy into such stock at these very attractive and current low levels. The set price contracts place immediate forward value earnings/ratings on these type of stocks, and I personaly couldn't think of a better place to park some cash at present, for anticipated high yield/returns down the track.
*****************************************

NMDC to hike contract prices for '06-07
RAKHI MAZUMDAR

TIMES NEWS NETWORK[ THURSDAY, MAY 25, 2006 12:00:00 PM]

KOLKATA: The country’s largest producer of iron ore, National Mineral Development Corp (NMDC), is slated to announce a hike in contract prices for ’06-07, within the next ten days. As a result, domestic steel producers are likely to bear a 19% increase in ore prices this year.

NMDC’s decision follows a similar hike announced by global mining majors Rio Tinto and Companhia Vale do Rio Doce (CVRD) of Brazil, which has just concluded price negotiations with leading steel companies like Mittal Steel, ThyssenKrupp, Posco and Japanese steel mills, for supplies upto March ’07.

“We have already decided on a 15% interim price hike with effect from April 1, ’06. We are set to announce a further hike of around 4%, to adjust to variations in global benchmark prices,” top NMDC sources told ET from Hyderabad.

The price hike announced by the likes of Rio Tinto and CVRD and BHP Billiton serve as the global benchmark and Indian producers take a cue from it before deciding on any price revision.

Last year, CVRD for instance, announced an unprecedented 71.5% hike in ore prices, triggering off similar price increases globally.

This year, major steel producers have agreed on 19% rise in price of iron ore fines 19%, and 3% reduction in pellet prices. Chinese steel companies, which are the largest consumers of iron ore, have resisted this price hike.

With most global steel companies agreeing to price hikes announced by Rio and CVRD, the pressure is now building up on China to agree to a similar hike.

wrxsti