London’s Financial Times newspaper reports on Monday that iron ore miners and Japanese steelmakers have reached a tentative agreement to adopt short-term contracts linked to the spot market, bringing to an end the 40-year old annual benchmark system.
"There is an understanding on both sides to move to quarterly pricing," the newspaper quoted a source involved in the talks as saying. The source added that a final deal will be settled in a matter of weeks.
Reuters confirmed sources in Asia as saying that negotiations were continuing about a move to quarterly pricing.
"Korea, Japan and China have received 90-100 percent hike offers based on quarterly systems from miners, which Japanese steelmakers seem to move toward accepting," a source at a large Asia steelmaker close to the negotiations said.
One sources suggested that Japanese steel mills are ready to accept the change as they are more concerned about security of supply than prices and are seeking to safeguard tonnage rather than prices.
Current spot iron ore prices are trading at twice the level of the 2009 benchmark.
A move towards quarterly coking coal contracts was announced earlier this month and analysts expect iron ore to adopt a similar system.
No comments:
Post a Comment