Don’t Expect Chinese Iron Ore Agreement Soon

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By Rudi Filapek-Vandyck

Most of the world’s largest consumers of iron ore have agreed to a 19% price rise for the new year (Japanese fiscal 2007) but the Chinese steel mills are in no hurry to sign their own supply contracts just yet.

Chinese media is quoting officials from the industry suggesting China is in no hurry to end the ongoing negotiations, regardless of whether steel companies in Europe, Japan and South Korea have already agreed to a 19% price rise for one of the key ingredients for their trade.

This makes the reaching of any agreement before the end of May unlikely.

The annual deadline for the negotiations between the world’s three largest suppliers of iron ore, Brazil’s Companhia Vale do Rio Doce, BHP Billiton (BHP) and Rio Tinto (RIO), was set for April 1. The contracts usually run until the end of March the following year.

Chinese steel manufacturers are estimated to consume circa 60% of global iron ore supplies in the twelve months to March 2007.

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