Iron Ore: The System Began To Shake The Base Price

Quietly in an email to a reporter's mailbox. Conclusionincrease, it is inevitable." Famous steel analyst Xu
of the negotiations in the international iron ore the firstXiangchun told "Business Week" interview, think so. In
time, CVRD announced to the national media: theirthis regard, executive director of CVRD, iron ore head
own and China's largest steel manufacturer BaosteelJose? Carlos? Martins in the first time for the
has been on the 2008 international agreement on iron"Business Weekly" interview, also described a similar
ore benchmark prices: the southern system Vale orepoint of view, he pointed out: "In China, iron ore spot the
powder price based on the ascent in 2007, 65%,market's trading volume reached more than 300 million
Caracas powder ore prices 71%. As expected,tons per year, while the spot price is much higher than
Baosteel finally accepted a week ago, Nippon Steel ofthe price of long-term contract price negotiations, in
Japan (Nippon) and POSCO (Posco) has beenview of this, in 2008 iron ore price is a reasonable
reached and the Vale of iron ore rose.result. "
Following the iron ore price in 2005 to 71.5% growthSync up with the iron ore price is the price of steel.
recorded in the history of iron ore rose the most, again,February 25, in the Vale by e-mail the same day the
65% gain in the Chinese challenge to the nerve.second quarter, Baosteel announced major price
Steel without the bottom lineincreases of 500 tons of steel variety? 1000. "This
65% of the increase really beyond many people'srises to digest this basically brought about by rising iron
expectations. 2007 iron ore negotiations, Chinese steelore costs." Xu Xiangchun think.
companies due to the joint, and then expect steel    Since 2007, 19% iron ore price increases since
prices are far lower than current prices, current ironthe sharp rise in domestic and international markets for
ore prices rose only 9.5%. The face of the first half ofraw materials has long been expected. Therefore, the
2008, the shortage of iron ore supply is still in reality, it isinternational steel market prices from the beginning of
generally accepted grid iron ore will increase at overthe year 2008, started up, different varieties of steel
30% of the expected, while the domestic steelper ton rose to 100? 200. Xu Xiangchun to the
enterprises, "should accept no less than 40% up price"Business Weekly" careful calculations of: iron ore rose
increases, "industry experts predict that. Once, a65%, if, if only using imported ore, the ore in this part of
domestic-related large-scale steel enterprisethe cost increase of about 60 U.S. dollars per ton.
executives said the company can accept the priceToday, steel prices have risen 100 per ton? 200 U.S.
increase of only 20%? 30%.dollars, the steel price increase iron ore prices already
However, when the 65% increase was announced,more than the cost increase. Even with the cost of
and not many Chinese companies found it difficult tocoke and other products, in general, "65% of the
accept, one important reason is that domestic iron oreincrease did not reach the bottom line of China's steel
spot prices higher. Hebei iron ore market, for example,mills." In other words, the 65% gain in the short term,
the spot price of fine iron powder of the tax has morethe impact of China's iron and steel enterprises is not
than 200 U.S. dollars, and international long-termlarge.
contract from Brazil to China port CIF up to 140 dollars,China's current pattern of iron and steel enterprises in
Australia to Chinese ports of Powdered Iron, Price onlythe supply of iron ore that it was not only dependent
about 90 dollars. In the same spot appeared on theon CVRD, BHP Billiton and Rio Tinto that the Big Three
market price and the wide gap between the long-termimports.
price. "Supply-side demands a substantial price