Korea, Japan To Oppose Iron Ore Price Hikes

Industries, Government Opposed To Pilbara Merger

South Korea’s government and the country’s steelmakers will hold talks in Tokyo with their Japanese counterparts about the sharp rise in iron ore prices.
The Korea Iron & Steel Association, whose members include Posco and Hyundai Steel Co., will hold talks in Tokyo with its Japanese counterpart to form a consensus, South Korea’s Ministry of Knowledge Economy said today.

The ministry said officials and executives at the joint government-private sector gathering concurred that the 90 percent on-year hikes in iron ore and 55 percent gains in bituminous coal prices will increase steel product prices, which will then cause price rises in other industries.

A joint press release said that "a rise in steel prices will adversely affect autos, shipbuilding and industrial plant sectors that can hurt consumers and overall sales," adding that companies in both South Korea and Japan have agreed to work together to follow price increases being pursued by global miners Vale, Rio Tinto and BHP Billiton. The groups are also concerned about a move to shorter-term contracts.

Chinese and European steelmakers have also made it clear that they oppose the rise in prices.

The bi-lateral talks are part of an annual gathering between the two groups and the countries’ governments. Talk will also focus on cooperation against plans to combine BHP and Rio Tinto’s plans to combine iron-ore assets in Australia claiming that the venture may hinder competition.

Lee Seung-woo, head of the Ministry of Knowledge Economy's steel and chemical industry division, represented South Korea at the meeting, while the Japanese delegation was headed by Masaki Koito, head of steel industry division at the Ministry of International Trade and Industry.

Executives from the Nippon Steel Corporation and the Iron and Steel Institute of Japan also attended the meeting.