massive iron ore price increase

Taken from Market Watch tonight.




Rio, BHP Billiton warn Chinese companies of record iron-ore price rises

By MarketWatch
Last update: 8:47 p.m. EDT June 22, 2008Comments: 8
HONG KONG (MarketWatch) -- Rio Tinto PLC (RTP:rio tinto plc sponsored adr
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Last: 479.00-0.50-0.10%

4:07pm 06/20/2008

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RTP 479.00, -0.50, -0.1%) and BHP Billiton Ltd. (BHP:BHP Billiton Ltd
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Last: 83.62-3.15-3.63%

4:03pm 06/20/2008

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BHP 83.62, -3.15, -3.6%) have asked their Chinese steelmaker customers to accept the largest ever increase in iron ore prices or risk the interruption of supplies from Australia, the Financial Times reported on its Web site Monday, citing traders and industry officials.
The mining companies have demanded price increases for their annual iron ore contracts in excess of the record 71.5% rise of 2005 and were fighting for increases of 85% to 95%, the FT said.
Rio and BHP have warned their Chinese clients some annual contracts will expire next Monday, and they would cease supply under the old terms. They have told them the ore would instead be sold into the spot market, where prices are higher, according to the paper.
It cited analysts as saying most of Rio's iron ore contracts expire June 30, but some BHP contracts don't expire until September, leaving it time to negotiate and allowing Rio to take the lead in the discussions.
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Could help boost the UMC share price past $2.50

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