subject: Iron Ore, "a Long Association Model" Collapse Risk - The Import Of Iron Ore, Iron Ore [print this page] 4 1 soon arrived, however, China Iron ore Manufacturers, and two major international mining companies in Australia Rio Tinto and BHP Billiton's price negotiations are still deadlocked. Australia imposed the additional shipping surcharge to meet the requirements of the case has not been started a long-term agreement to gradually reduce shipments to China.
Market rumors that even then, if the Chinese manufacturers do not agree to the request, the Australian side will stop shipping ore prices by long-term agreement.
Recently, China Iron and steel industry Association vice president Luo Bingsheng two miners in Australia criticized the practice, pointing out that the unilateral destruction of rules of the game, would seriously impede the process of iron ore negotiations. "Long association model" is likely to be the Australian side of the practice to destroy.
Accordance with international practice, every year on April 1 will implement the new long-term iron ore price agreement. If you will not reach a new long-term iron ore price agreement, the price automatically run for three months last year; three months after the price has not Tan Long, will automatically terminate the contract. Chinese companies will only go higher spot market prices to buy mine.
2 months, Rio Tinto in China Tender The spot price of iron ore sales have reached 195 to 198 U.S. dollars per ton. In contrast, Australia's long association ore price is only 80 U.S. dollars per ton.
However, the "automatically run for three months last year the price" is not the practice of Insurance In a seller's market, the Australian mining two miners has now not speak to this practice, now has begun to reduce the agreement to supply, prices will move higher share of the cash market, Australia and even criticized China's recent restrictions on imports of its stock.
Said, according to Luo, starting from January 2008, the Australian side, including artificially reduce Baosteel steel enterprises in China, including 10% of shipments under long-term agreement, but a large amount of ore turned into the spot market. Luo analysis, in accordance with the current developments, "a long association model" is likely to be the Australian side of the practice to destroy.
2 months, the Chinese manufacturers to accept Brazil's CVRD from 65 to 71 percent of the price increases, follow the practice of the two Australian mining companies have access to the same natural right prices.
However, the two miners have made CIF settlement, resulting in additional shipping surcharge levied iron ore requirements, and adhere to a charter by the supply-side sea, on the ground ore to reach China and Brazil CIF line, but in fact, because Brazil Geography From China on remote Australian mining CIF CIF natural than to Brazilian ore CIF as a reference, in essence, seek higher've settled the Vale of Brazil, from 65 to 71 percent of the price increases, was firmly opposed to China's manufacturers.
However, Australia is not up to this time seems to not give up. Recently, the Australian company, Rio Tinto iron ore chief executive SamWalsh said, Rio Tinto will continue to patiently wait for the iron ore price increase to 71% or more. He also said that the current practice of annual iron ore pricing mechanism will change.
Industry concerns, it goes on, the effective functioning of the international iron ore price negotiations for decades system will collapse, the international iron ore market will become a pure spot market.
