Global iron ore miners won't agree to Chinese demands for a 40%-50% cut in iron ore benchmark prices versus last year's terms, a person familiar with the ongoing price negotiations said late Wednesday.
He said it's more likely the three mining majors, Companhia Vale do Rio Doce ( RIO), Rio Tinto PLC (RTP) and BHP Billiton Ltd. (BHP), will first settle price cuts - estimated at 30%-35% - with Korean and Japanese mills, which could then pave the way for a compromise with China.
"You can be pretty sure the miners won't accept 40%-50%," the person said.
Talks for fresh price terms have dragged well past their April 1 deadline.
The person portrayed the Chinese side in the annual talks as torn by two factions, with the more hardline voices now dominant.
"The Chinese are not being overly reasonable," the person said. "They like to fire off, and they like to say this is unacceptable and that is unacceptable. ( But) they are conflicted...behind the scenes there is a smarter, more market- oriented set."
Source: Dow Jones
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