Iron and iron alloy manufacturers are anticipated to weigh down the cost of procurement of metal ore

The world’s largest mineral and iron and steel manufacturers to conduct secret negotiations on iron ore prices are moving in favor of the direction of the iron and steel producers to develop this year negotiated contract price of iron ore supply may be significantly below last year’s level.

Secretary-General of China Iron and Steel Association predicted that the single-Shanghua, iron ore exports of high-margin end of the era.

The world’s largest manufacturer of steel pohang iron & steel Company (Posco) said this week that, in view of the current economic situation and weak market demand, iron ore prices should be reduced to half the 2008 level, which means that in 2009 the per ton of iron ore price will be between 40-45 U.S. dollars.

POSCO anticipates metal ore cost discussions will be the end of this month. As the metal ore manufacturers and iron alloy manufacturers had liked to delay for the position in the international finances become clear, the discussions had stalled. Including Australia FortescueMetalsGroupLtd. Including several little and medium-sized metal ore manufacturers have demonstrated that they arranged to metal ore charges at present grades not less than 30% down.

Earlier this year, metal ore manufacturers had wanted that the metal ore charges in 2009 to sustain the grade in 2008. By February, the metal ore cost boost is not more than 20% of them satisfied. Analysts state it appears now that the cost of metal ore this year, down 30% not less than the likelihood of growing.

BHP Billiton (BHPBilliton) and Rio Tinto (RioTinto) The two companies have said that in the iron ore price negotiations will not be made public prior to the completion of their comment. BHP Billiton spokesman said the company is related to consumers not to comment on the negotiations.

However, Rio Tinto head of iron ore Walsh (SamWalsh) has said that he believes that 50% of the price range too high. Walsh declined to eventually be able to talk about his view into what is the price.

Rio Tinto, BHP Billiton and Brazil’s CVRD (Cia.ValedoRioDoce) and other metal ore manufacturers had wanted that the world introduction of the diverse financial incentive assesses will encourage the development of the building commerce, metal and iron alloy manufacturers to boost the metal ore demand, they need metal ore to make engine vehicles, mechanism and building steel.

However, the market’s demand for steel ore expansion did not occur. Rio Tinto this week uncovered that the first quarter of this year, the company’s steel ore goods produced over the matching interval diminished by 15%. BHP Billiton is looked frontwards to and CVRD steel ore goods produced will in addition decline. World hard metal demand is looked frontwards to until the summer before the advent of growth. This means that steel ore makers and hard metal manufacturers in negotiating the bond charge of steel ore in 2009, when there is little room for maneuver, because of deliver and demand boundaries ought be before the end of April each year to finalize next year’s steel ore bond price.

BHP Billiton would like to abolish the present 12 months of steel ore cost procedure will surely expect that supported on site costs or some other charge indicator to ascertain the bond charge of steel ore. Iron ore site charge is presently throughout 50 U.S. dollars per ton fluctuations, though higher than that at the end of last year’s small of 36 U.S. dollars per tonne, still under the record high of 120 U.S. dollars per ton. CVRD and Rio Tinto would like to uphold the surviving bond cost, which is conducive to charge stability.

Minerals in the large-scale steel and hard metal makers and steel ore charge dialogues still in improvement, the number of slighter hard metal makers and steel ore makers have arrived at an accord in the over-the-counter. Houston, United States, a tiny steel ore maker Cotton & WesternMiningInc. Announced that it has customers in China arrived at about 45 U.S. dollars per ton in 2009 costs of steel ore suppliers.

Some analysts anticipate that China, as the major trading nations, as well as the metal ore cost discussions for metal ore of the arbitrator in detail, the demand for metal ore in 2009 than in 2008 almost 100 million tons.

China’s iron ore imports of iron ore accounts for 80% of global trade. China Metallurgical Mining Enterprise Association said consultants ZOU Jian, China 2009 iron ore imports will be 350 million tons, which is lower than in 2008 443 million tons. He said that the decline in imports was partly due to China’s domestic iron ore production continue to increase.

Pohang iron & steel company vice president of procurement of raw materials in a press release said that the price expectations of both sides of supply and demand vary widely, and mineral companies want to only 20 percent price reduction, while we believe that iron ore prices than in 2008-09, at least 50% reduction in the level of the year.

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