aussie miners want iron ore price hike

By April 1st 2010 we'll hopefully all know the extent of the global Iron Ore price hike.

This would have to play into AXO's favour in negotiating a deal. In my view there'll be a general re-rating of Iron Ore related stocks once confirmed + I hope AXO will capitalise on the momentum to fall / crawl over that last hurdle of finance.

http://news.smh.com.au/breaking-news-business/aussie-miners-want-iron-ore-price-hike-20100304-pkr5.html

AAP

Australian iron ore producers are set to receive a big jump in benchmark prices, with Chinese steel mills reportedly likely to accept a 50 per cent price hike.

Mining giants BHP Billiton and Rio Tinto Ltd along with the world's largest iron ore producer, Brazil's Vale, are seeking the increase in iron ore benchmark prices, China's official media says.

The miners are locked in negotiations with the Chinese mills to reach an agreement on a benchmark price for 2010/11, and a 50 per cent increase would send the price of iron ore fines to about $US91.50 per tonne.

A source told the China Daily the steel mills may have no choice but to agree to a 50 per cent rise to current benchmark prices.

"If other Asian steel mills accept the new ore prices, then Chinese steel mills will have no other choice but to accept the same as stopping production is not in the best interests of the industry," the source said.

"The tough stance adopted by BHP Billiton, Rio Tinto and Vale could put further pressure on the sagging bottom lines of Chinese steel mills," the newspaper said, quoting industry sources.

Chinese steel mills last year refused to agree to pay the benchmark rate accepted by Japanese and Korean competitors, insisting that because they were the largest buyers of iron ore they should be given a discount.

The move backfired when many Chinese mills were forced to pay much higher spot prices, or an index-based price.

Other Chinese mills signed their own contracts with miners in line with the benchmark rate.

Spot prices have surged to more than double the current benchmark rate, giving rise to expectations the new contract price will be much higher.

BHP Billiton and Rio Tinto refused to discuss iron ore price negotiations, when contacted by AAP.

BHP chief Marius Kloppers has previously said the best guide was the spot price.

Iron ore is Australia's second largest commodity export earner, after coal.