Chinese steelmakers negotiating price cut of iron ore

Chinese steelmakers negotiating price cut of iron ore with miners

There might be a price cut of iron ore with 10~20 percent for annual contract of 2009, said the attendants, including with traders and bankers, at a conference in Quindao city of China last week. Because of declining of steel production and the global economy downturn, the steel makers in China leading by Baosteel are seeking the first price cut in seven year from the iron ore miners of Vale of Brazil, Rio Tinto and BHP Billiton.

Bankers said a price cut would be just a small amount in miners’ high revenues as ore prices have jumped by more than 300 percent in the past five years.
The price cut would be the first reduction since the very last price decrease, 2.4 percent of iron ore in 2002, because of the dotcom bubble. Chinese steelmakers are pushing to make a quick agreement during the slow markets, but the miners are no rush to settle until the second quarter of next year, expecting a recover of economy.