Rise in iron ore price accepted
By Jiang Wei (China Daily)
Updated: 2006-06-21 08:35
Chinese importers yesterday agreed to a 19 per cent rise in the price of iron
ore, the second biggest increase in 25 years.
Shanghai Baosteel Group,
representing Chinese iron ore importers in talks with major international
suppliers, accepted the price rise from BHP Billiton, the world's largest
resources company.
BHP Billiton issued a statement confirming it reached
agreement with Chinese customers on prices for contracted iron ore tonnage for
the 2006 contract year.
"Prices increased by 19 per cent over prices
negotiated in respect of the 2005 year across the range of lump and fines iron
ore products supplied by BHP Billiton," it said.
The price rise had been
agreed a couple of weeks ago by some European, Japanese and other Asian steel
producers.
It means Chinese iron ore importers will have to pay about 10
billion yuan (US$1.25 billion) more each year.
Chinese steelmakers will
sign contracts with Brazil's Cia Vale do Rio Doce (CVRD), and the London-based
Rio Tinto Group, the world's other two major iron ore producers, in one or two
days, said an unnamed source close to the situation.
CVRD, BHP Billiton
and Rio account for 75 per cent of global seaborne iron ore trade.
The
Chinese firms' talks with suppliers had been prolonged for weeks compared with
other iron ore buyers.
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