China Iron and Steel Association will not agree to the insufficient temporary 20% price cut offered by Rio Tinto Group, the world's second largest iron ore producer, and said Chinese steel makers should only pay 60% of iron purchases until a better arrangement can be reached, China Business News reported on Wednesday.
Rio Tinto offered a temporary 20% price discount to Asian steelmakers to try to reach a new agreement with buyers on this year's price for iron ore, according to four executives familiar with the deal.
Rio Tinto's offered price cut falls far below the 40% to 50% discount expected by Chinese steelmakers, the world's largest buyers of iron ore. Steel prices have been declining sharply, and production costs now sometimes exceed product prices.
Earlier this month, Baoshan Iron and Steel Co Ltd, the largest listed steel maker in China, cut prices of major hot-rolled steel products by 7% to RMB 3,292 per ton and those of cold-rolled steel products by 4% to RMB 3,826 per ton.
Source: China Knowledge
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