here is another one.
http://www.bloomberg.com/apps/news?pid=20601081&sid=akP4Zir48sPA
Steel Mills May Want Early Ore Accord, Goldman Says (Update1)
Share Business ExchangeTwitterFacebook| Email | Print | A A A By Rebecca Keenan
Jan. 5 (Bloomberg) -- Asian steelmakers may want to settle annual contract iron ore prices with suppliers including BHP Billiton Ltd. and Rio Tinto Group sooner rather than later as the so-called spot price gains, Goldman Sachs JBWere Pty said.
Prices for the raw material delivered to China for immediate delivery have more than doubled from their 2009 low in March, rising by the most in five months on Dec. 31, because of demand from Chinese mills, the biggest users. The rise has prompted banks to raise contract price forecasts and India to impose a duty on its exports to boost domestic supply.
With spot iron ore now trading at a theoretical premium of 80 percent to the Japanese contract price there must be a growing motivation for mills to lock in contract prices sooner rather than later, Goldman analysts led by Malcolm Southwood said in a report dated yesterday. Mills may concede bigger price hikes than our plus 20 percent forecast for Australian ore, he said.
Iron ore suppliers hold annual talks with steelmakers to fix contract prices for the 12 months from April 1, the start of the Japanese financial year.
Spot sales may have accounted for about 60 percent of all iron ore trades in China last year, London Commodity Brokers Ltd. Chief Executive Officer Clive Murray said in October.
To contact the reporter on this story: Rebecca Keenan in Melbourne at [email protected]
Last Updated: January 4, 2010 18:21 EST
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