POSCO requested cut straight down 50% iron ore price – steel, iron ore – Pump In
Mining giants Rio Tinto and Chinese steel industry has showed the decline in iron ore price negotiations this year, the bottom line, the world's fourth largest South Korean steel maker Posco greater appetite for the former were 20%, 40%, Pohang is directly "down 50%."
Industry believes that this year's iron ore contract price cut is a foregone conclusion a long association, how much lower prices is supply and demand sides focused on the current game.
Posco's vice president responsible for the procurement of raw materials all Wing Tai (KwonYoung-tae) an interview last week that Rio Tinto is currently being conducted with the initial contact, asking for a lower price agreement. "Mining companies are seeking a 20% drop, which is a considerable gap between expected. We believe that iron ore prices in 2008 and 2009 decreased the level of at least 50%, and called for negotiations to end in April."
Last week, Rio Tinto has just thrown off the set in the negotiations before the temporary 20% price cut proposal was immediately opposed CISA clear that this drop is too low, the level should be anchored in 2007, must be based on the current price to decline. It also means that China's demand is down at least 40% iron ore price.
Today, as the Asian steel giants POSCO, shouted a larger drop, also has been the execution of the contract of the iron ore talks still stalled more complicated and confusing. "Iron and steel market situation is extremely weak, especially in Europe and Japan." Whole Wing Tai said.
Current global steel industry are making cuts, limited shutdown, or even restructure the company to reduce expenditure, the demand for iron ore declined sharply. In last Saturday "House of Steel," Steel Industry Development Strategy at the seminar, China Metallurgical Mining Enterprise Association, Zou Jian, told CBN consultant reporters, the first quarter of this year, iron ore from Brazil to Europe, exports fell by 69% only to the 47.4% export growth in China, "In addition to China, Europe and other Asian steel mills are substantially reduced iron ore imports, now 80% of global iron ore sold to China, while only 50% last year."
However, because of China captured the last straw, and it is expected the Chinese economy will eventually pick up this year, mining giants do not want to "aggrieved" drop too much to accept.
Previously, Rio Tinto iron ore business executives SamWalsh says that confidence in this year's iron ore and steel companies in negotiations to achieve a relatively acceptable price, while 50% of the price reduction is forecast for the miners too large, it is difficult to accept.
This, Zou Jian pointed out that even if the long-term contract prices for iron ore this year, 40%, three mining companies are making money, mining companies are unwilling to accept the demand side of the drop, it is hoped that greater profit margins. He expects annual steel exports this year than in 2008 to reduce 20 million tons more than the annual steel output down 8% over the previous year, China's demand for iron ore mine finished about 60 million less than last year tons. Europe, North America, Japan's steel output in 2009 would drop by more than 15%, thereby reducing the more than 60 million tons of iron ore demand. Potential demand for iron ore supply over the world about 200 million tons. So this year, mineral producers, the importance of security should be far greater than the amount insured important.
By the end of March this year, iron ore spot prices from June 2008 has been the high point down by 57%, while in previous years due to the support of the negotiations this time, spot prices are high, so a long association of iron ore this year Price no reason not to decline.
As iron ore has entered the buyer's market, China also began to use the "volume-for-price" approach to negotiations, so as to obtain a higher drop. Secretary-General of China Iron and Steel Association, China still had a single CBN reporter said, China Steel Association has put the nation's major steel mills for iron ore this year, aggregate demand out to Baoshan negotiations, each firm can not talk about the external, respectively, even On the volume is not OK, "the three major Chinese mining giant, who first met the conditions, about whom we first set, which also includes the distribution of the total."
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