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Monday, April 27, 2009

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

By Zou himfr

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 forecast that the single-Shanghua, metal ore trade items of high-margin end of the era.

The world's greatest fabricator of hard metal pohang steel & hard metal Company (Posco) said this week that, in scenery of the prevailing monetary circumstances and frail market demand, steel ore costs should be lessened to half the 2008 stage, which means that in 2009 the per ton of steel ore charge will be between 40-45 U.S. dollars.

POSCO looks frontwards to steel ore charge dialogues will be the end of this month. As the steel ore makers and hard metal manufacturers had desired to hold back for the circumstances in the worldwide economic procedure become clear, the dialogues had stalled. Including Australia FortescueMetalsGroupLtd. Including some tiny and medium-sized steel ore makers have showed that they organised to steel ore costs at prevailing stages a least 30% down.

Earlier this year, steel ore makers had trusted that the steel ore costs in 2009 to uphold the stage in 2008. By February, the steel ore charge advance is not more than 20% of them satisfied. Analysts declare it looks like now that the charge of steel ore this year, down 30% a least the prospect of growing.

BHP Billiton (BHPBilliton) and Rio Tinto (RioTinto) The two businesses have said that in the metal ore cost discussions will not be made public former to the culmination of their comment. BHP Billiton representative said the business is associated to buyers not to commentary 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 iron ore producers had hoped that the world introduction of the various economic stimulus measures will promote the development of the construction industry, iron and steel manufacturers to increase the iron ore demand, they need iron ore to produce motor vehicles, machinery and construction 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 iron ore pricing system will certainly hope that based on spot prices or some other price index to determine the contract price of iron ore. Iron ore spot price is currently around 50 U.S. dollars per ton fluctuations, although higher than that at the end of last year's low of 36 U.S. dollars per tonne, still below the record high of 120 U.S. dollars per ton. CVRD and Rio Tinto would like to maintain the existing contract pricing, which is conducive to price 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 look frontwards to that China, as the principle dealing nations, as well as the steel ore charge dialogues for steel ore of the arbitrator in item, the demand for steel ore in 2009 than in 2008 close to 100 million tons.

China's steel ore deals of steel ore statements for 80% of worldwide trade. China Metallurgical Mining Enterprise Association said experts ZOU Jian, China 2009 steel ore deals will be 350 million tons, which is worse than in 2008 443 million tons. He said that the descent in deals was to some extent due to China's in the household steel ore goods produced carry on 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. - 18762

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