Nippon Steel Corp., the world's second-biggest steelmaker has accepted a record increase in iron ore prices from BHP Billiton Ltd., matching a doubling of prices agreed last month with Rio Tinto Group.
The steelmaker, which in April said higher costs would pare annual profit 41 percent, will pay BHP as much as 97 percent more for ore, Masato Suzuki, a spokesman for the Tokyo-based company said today by phone. JFE Holdings Inc., Japan's second-biggest mill, also accepted the BHP increase, said an official for the company's steelmaking unit, who asked not to be identified.
The BHP contracts, the last to be settled among Asian steelmakers and the world's three biggest suppliers of iron ore, marked the first year in which miners in Australia gained bigger price increases than rivals in Brazil. Nippon Steel and its largest Asian rivals in February agreed to increases of as much as 71 percent from Cia. Vale do Rio Doce, the world's biggest iron-ore producer.
Iron ore prices have gained almost fourfold since 2001 to a record, increasing costs for Japanese steelmakers, which rely exclusively on imported materials. It's the first time the year's initial agreement on ore price wasn't accepted as the benchmark.
Baosteel Group Corp., China's biggest mill, last week accepted an increase of as much as 97 percent for ore from BHP, the world's biggest mining company. This matched an increase won last month from Asian steelmakers by Rio Tinto Group, the world's second-biggest iron-ore supplier.
``We can confirm we have settled with all our Japanese customers,'' Emma Meade, a spokeswoman for Melbourne-based BHP said today. She confirmed the contract price agreements were for the same price as last week's with Baosteel.
Source: Bloomberg
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