bhp billiton to settle iron ore contracts

BHP Billiton to settle iron ore contracts

By Rebecca Bream and Javier Blas
Thursday Jul 3 2008 00:30
BHP Billiton (NYSE:BHP) , the mining company, is on Thursday expected to agree a record increase in the price of iron ore supplies to its largest Chinese customers, in line with a settlement negotiated last week by rival Rio Tinto.

Traders and analysts had first bet, encouraged by comments from senior BHP executives, that the miner would push for a larger price increase than Rio's 79-96 per cent. Some traders suggested a 100 per cent price increase was on the cards for the ore, a key raw material of steel.

But strong opposition from the China Iron and Steel Association, the leading industry group, against any price increase beyond the terms already agreed with Rio has damped market sentiment. The association said last week that the price settlement between Rio Tinto and the Chinese steelmakers "should be affirmed".