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China ready to accept 19% ore price hike
30/05/2006 07:36:46 AM


Chinese steel mills have decided to accept a 19 per cent price hike for iron ore, putting an end to months of negotiations with the world's top miners, including Brazil's CVRD, industry sources say.

The sources said the decision came after a Beijing meeting of the country's top 16 mills, headed by Baosteel Group.

This would put Chinese mills in line with top steel makers around the world, including Arcelor and South Korea's POSCO, which have already accepted the 19 per cent price rise first settled by ThyssenKrupp AG.

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No comment was immediately available from Baosteel, which headed the negotiations with the miners, Companhia Vale do Rio Doce, (CVRD), Rio Tinto Ltd./Plc. and BHP Billiton Ltd./Plc.

CVRD officials were also not immediately available to comment.

Last year iron ore miners won a 71.5 per cent price hike on the back of growing demand for ore to keep pace with China's expanding steel making sector.

The Chinese industry had held off on accepting the price, even as other Asian and European steelmakers fell in line.

China, the world's top importer of iron ore, had claimed the right to lead negotiations and resented that smaller mills had set the prices.

The profits of Chinese mills have been squeezed in part due to fierce competition among mills that are fighting for survival following rapid expansion.




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