BHP Iron Ore Price "Up 99.7%"

Asian customers to pay double

BHP Billiton has won a 99.7 per cent price rise from its Asian iron ore customers for the April-June quarter.

The news came from the London-based commodity team at Macquarie Bank, which cited steel industry sources in Japan. BHP will charge $US120.08 a tonne for Pilbara fines iron ore which, the bank says, "represents a massive 99.7 per cent rise over 2009 Japanese fiscal year contracts".

However, taking into account current freight rates, the settlement would result in Australian iron ore landing at around $US131.50/tonne on a delivered Asia basis, a 22 per cent discount to current spot levels.

Macquarie understands that prices for BHP's lump iron ore were approximately $US135/tonne for the March-June quarter, 88 per cent above 2009 levels.

In March BHP said it had reached agreement with a significant number of Asian to move existing annual iron ore contracts onto quarterly pricing arrangements.