Iron ore negotiations may have a direct cross to the next

Protracted 2009 annual iron ore price negotiations finally have one that I'm tired.

Recently, Rio Tinto iron ore business executives SamWalsh said, there is no negotiating with China on iron ore. As to when to restart negotiations is unknown. Industry sources said, "die a natural death" will be the most likely outcome this year.

Early in August, imports of iron ore spot prices rose to a high point so far this year 110 U.S. dollars / ton, but as a straight line down the domestic steel and iron ore spot prices have also followed a substantial decline, to last week, has already dropped to 80 U.S. dollars / t.

According to Japan and Australia starting price projections, Australia ore FOB price of 61 U.S. dollars / ton, plus the sea freight spot near 11 U.S. dollars / ton, Australia or owner co-price 72 U.S. dollars / ton; and according to CVRD and Japan and South Korea Prices reached an agreement, the Brazilian ore FOB price of 55 U.S. dollars / ton, plus about 29 U.S. dollars / tons of sea freight, the Brazilian Association or owner the price 84 U.S. dollars / tons. Thus, the current spot price of iron ore mine in Brazil has been less than the price of a long association, with further approaching the long co-Australian mining prices.

Before some have suggested, with the iron ore spot prices drop, mining enterprises of the attitude or relaxed. However, Rio Tinto, this position has actually eliminated the possibility of any compromise.

Analysts said the three major iron ore production plant has been on the procurement of "temporary price" to reach a tacit understanding with the Chinese steel mills, as long as does not appear similar to the second half of 2008 iron ore price drop, the two sides will not change easily.

At present, this is a temporary price Rio Tinto and Nippon Steel signed on May 26 starting in 2009 iron ore price drop of 33%. SamWalsh confirmed the existence of such a fact.

Beijing Information Director Xu Xiangchun VAI, said Rio Tinto is expected to suspend negotiations on the matter. Although the price reached an agreement with FMG, it is clear "big three" not accept it.
August 17, China Steel Association announced the pricing agreements with FMG, price cut of about 35%, and, FMG commitment to the Chinese market, iron ore sold to only a price. China Steel Association said that this model should be applied to the "big three" of the negotiations.

Rio Tinto clearly stated in the message issued immediately after the price "is not exemplary," BHP Billiton later interviewed by the media, also expressed similar meaning.

Brazil's CVRD CEO Roger Agnelli, also recently said that will not lower prices with the Chinese in 2009 on the basis of the annual iron ore price negotiations.

For the China Steel Association released its annual iron ore negotiations FMG model, the three major iron ore producers have been say no.

Xu Xiangchun said that this year's iron ore price negotiations breakthrough in the deadlock is no longer possible, neither the results are out, it will not declare rupture.

Shougang plant last week to celebrate the 90th anniversary of the General Assembly, the participating representatives of the three mines are cautious and a 拒人于千里之外 looks like. Analysts believe that this also reflects a certain wariness of the current existence of the two sides, in such an atmosphere it is difficult to continue to remain at the negotiating table.

By convention, every year in October next year's iron ore price will start pre-negotiations, negotiations have shaped this year, such as "tasteless." Many industry analysts believe that a direct transition to the negotiations in 2010, a great possibility.

An analyst on condition of anonymity, said the negotiations on iron ore by 2010, led by Baoshan Iron and Steel re the possibility of being increased, so ore prices might be more negotiations to focus on to do more to prepare for the 2010.

As for next year how can we talk, Xu Xiangchun said he was also "very confused" because too many unknown factors. "But the point can be sure that is, only one of this year's negotiations did not break, for next year's negotiation mechanism will certainly have a great impact."

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