bhp, china agree 40% provisional price gain , page-3

see the comments from Vale Director Jose Carlos Martins If our customers want to stick to benchmark prices, they will have to accept something close to the level of spot prices.

we are going to see a big jump in the benchmark price and therefore even greater pressure on the chinese to invest in AXO.

http://www.bloomberg.com/apps/news?pid=20601089&sid=aB4kbvLhQlWE

Australia Wont Interfere in China Iron Ore Price (Update1)
Share Business ExchangeTwitterFacebook| Email | Print | A A A By Wendy Pugh

Feb. 13 (Bloomberg) -- The Australian government wont interfere in iron ore price negotiations and China should act like a market economy, Trade Minister Simon Crean said.

Weve made the point to China, we have recognized you as a market economy, act as one, dont seek intervention from the government when it comes to market exchanges, Crean told reporters yesterday in Melbourne, according to a transcript released today.

Talks to set 2010 benchmark prices have begun between mills and suppliers including BHP Billiton Ltd. and Rio Tinto Group, the China Iron & Steel Association said this week. BHP and some steelmakers had agreed to a provisional 40 percent increase in contract prices, UC361.com analyst Hu Kai said, citing the mills.

Negotiations are for the market, Crean said, when asked to comment on media reports that a Chinese official had contacted the Australian embassy about pricing.

Australia also called for China to quickly conclude the legal case against four Rio Tinto employees charged with bribery and obtaining trade secrets.

Its now a matter for the courts to schedule the hearing, Crean said. Again, were calling for that process to be expeditiously conducted and transparently concluded, he said.

Prosecutors filed the case against the Rio employees with the Shanghai No. 1 Intermediate Peoples Court, Tao Wuping, a lawyer for one of the detainees Liu Caikui, said Feb. 11. The proceedings wont be made public because they concern commercial secrets, he said.

Acted Properly

The four, Australian Stern Hu, the head of the companys iron ore unit in China, Liu, Wang Yong and Ge Minqiang, have been detained for seven months. They acted properly and ethically the company said after they were formally arrested in August.

Rio was the lead negotiator for producers in last years stalemated iron-ore talks, the longest-running ever.

Vale SA, the worlds biggest iron-ore producer, said Feb. 11 it expected to win contract prices this year that reflected a soaring spot market.

Clients will have to accept a new price reality Vale Ferrous Minerals Director Jose Carlos Martins said on a conference call with analysts. If our customers want to stick to benchmark prices, they will have to accept something close to the level of spot prices.

The cash price for iron ore was $128.20 a metric ton yesterday, according to the Steel Index. Vale sold the commodity for an average price of $55.99 a ton last year, the company said in its earnings statement.

To contact the reporter on this story: Wendy Pugh in Melbourne [email protected].

Last Updated: February 13, 2010 03:22 EST