Baosteel Group Corp., China’s largest steelmaker, and other Chinese mills won a 35 percent reduction in iron ore prices from Australia’s Fortescue Metals Group Ltd.
The Chinese mills will pay 94 U.S. cents a dry metric ton unit for fines, the most commonly traded product, Shan Shanghua, the secretary general of the China Iron & Steel Association said today at a press conference in Beijing. The price agreement will apply for the second half of 2009, he said.
China had sought a discount of as much as 45 percent this year, more than the 33 percent offered by Rio Tinto Group, arguing it should enjoy a bigger cut as the largest buyer. The announcement follows the formal arrest of four Rio executives, including Australian Stern Hu, head of the company’s iron ore business in China, last week.
The price for lump iron ore will be 100 cents a dry metric ton unit, or 50 percent lower, Shan said.
Source: Bloomberg
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