From The Age
Big miners jack up iron ore price
June 8, 2010 - 1:07PM
BHP Billiton and Rio Tinto have notified Japanese steelmakers that the iron ore price for the July-September period will be raised about 23 per cent from the previous quarter, the Nikkei business daily says.
The paper also said Brazil's Vale is likely to follow suit.
The second consecutive quarterly hike will put iron ore at about $US147 a tonne, 140 per cent higher than the fiscal 2009 price, the paper said.
The 40-year-old annual iron ore pricing system collapsed in April when Rio Tinto followed BHP Billiton and Brazils Vale in adopting quarterly negotiated contracts.
A BHP Billiton spokeswoman said the company did not comment on iron ore price negotiations.Rio Tinto was not immediately available for comment.
Japanese steelmakers, who have agreed to negotiate resources prices quarterly instead of annually starting with the current fiscal year, are likely to settle for a price close to the proposed figure, the Nikkei reported.
With rapid price hikes in high-grade coal and iron ore, Japanese steelmakers are being forced to pass on the increases to large-lot users, including automakers, the daily reported.
Toyota and Nippon Steel are huddling over a 25 per cent hike for a key steel product, it said.
With demand for coking coal and iron ore in China and other emerging economies expected to soar in the medium and long run, their prices are likely to stay on an upward trajectory, the Nikkei said.
"We have to pass on hikes to steel prices and ask clients to shoulder increased costs," the paper quoted JFE Holdings president Hajime Bada as saying.
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