May 6 MetalBiz--Rio Tinto, one of three giant iron ore manufacturers, said that it will terminate the contract if the iron ore price can not reach an agreement as soon as possible. Shan Shanghua, secretary of CISA pointed out the opposite party is in psychological war and this trick can not be effective, as well as the current iron ore spot price has been lower than the requirements of China.

It is understood that China Iron and Steel Association (CISA) participates and guides the iron ore price negotiation all the time this year, and Australia Rio Tinto is the one of the three negotiators. Last year, Australia also threatened to terminate the contract. At the moment, steel enterprises and mines are on the deadlock about the iron ore price reduction, and a 40% price cut over 2008's is Chinese parties’ attitude, but Rio Tinto does not agree.

Rio Tinto iron ore business principle said to analyst that it will stop the contract, if the price can not reach an agreement before June 3. In this regard, Shan Shanghua said, this trick can not play a role this year and it is useless. Also, he expressed that China can not import iron ore for two months, but Rio Tinto can not stop production or give up China market for two months.

Why he addresses this expression? For further information please visit www.chinametalbiz.com

E-mail: info@chinametalbiz.com ■

May 6 MetalBiz--Rio Tinto, one of three giant iron ore manufacturers, said that it will terminate the contract if the iron ore price can not reach an agreement as soon as possible. Shan Shanghua, secretary of CISA pointed out the opposite party is in psychological war and this trick can not be effective, as well as the current iron ore spot price has been lower than the requirements of China.

It is understood that China Iron and Steel Association (CISA) participates and guides the iron ore price negotiation all the time this year, and Australia Rio Tinto is the one of the three negotiators. Last year, Australia also threatened to terminate the contract. At the moment, steel enterprises and mines are on the deadlock about the iron ore price reduction, and a 40% price cut over 2008's is Chinese parties’ attitude, but Rio Tinto does not agree.

Rio Tinto iron ore business principle said to analyst that it will stop the contract, if the price can not reach an agreement before June 3. In this regard, Shan Shanghua said, this trick can not play a role this year and it is useless. Also, he expressed that China can not import iron ore for two months, but Rio Tinto can not stop production or give up China market for two months.

Why he addresses this expression? For further information please visit www.chinametalbiz.com

E-mail: info@chinametalbiz.com ■

MetalBiz--According to foreign reports, the world's largest iron ore producer Vale will follow the example of its main rivals BHP Billiton and Rio Tinto companies to adopt a more flexible pricing strategy. Analysts believe that the purpose of this move is to occupy a favorable position in the battle of China market.

On May 7, the Chief Financial Officer of Vale Barbosa (FabioBarbosa) said in an interview that Vale is considering the new pricing model for the steel raw material. Under the existing pricing model, iron ore suppliers and steel producers conducts a price negotiation every year to determine the iron ore price for next year.

At present, chief executive officer of BHP Billiton MariusKloppers advocates to change the existing pricing model. He added that the new pricing model will ease the tension relations between the iron ore suppliers and steel manufacturers. BHP Billiton and Rio Tinto both expressed in 2008 that they will not carry out 200 iron ore pricing in accordance with the original ways. Currently, the two companies are the second and the third iron ore suppliers. The iron ore upper managements revealed that due the deadlock of annual price negotiation, Rio Tinto submit a 20% discount offer to Asia steel manufacturers last month.

Goldman Sachs analysts said on March 17 that because the demand shrinkage of downstream products resulted from the economic crisis, the iron ore price should sink 40% in accordance with the original pricing methods. Barbosa said: "We are more inclined to use the existing pricing way, but the market has proven that there are other feasible ways of pricing. If a customer needs, of course, we will consider other methods of pricing."

Iron ore business principle of BHP Billiton, IanAshby said that Chinese market exists two pricing ways. In the past three years, China had surpassed Japan and became the largest iron ore consumer all over the world. He also pointed out that on May 6 that the conventional iron ore pricing methods is being gradually broken at present. While MariusKloppers stated that the old pricing will make the relations between suppliers and manufacturers in fluctuation.

For more information please visit our website:www.chinametalbiz.com ■

MetalBiz--According to foreign reports, the world's largest iron ore producer Vale will follow the example of its main rivals BHP Billiton and Rio Tinto companies to adopt a more flexible pricing strategy. Analysts believe that the purpose of this move is to occupy a favorable position in the battle of China market.

On May 7, the Chief Financial Officer of Vale Barbosa (FabioBarbosa) said in an interview that Vale is considering the new pricing model for the steel raw material. Under the existing pricing model, iron ore suppliers and steel producers conducts a price negotiation every year to determine the iron ore price for next year.

At present, chief executive officer of BHP Billiton MariusKloppers advocates to change the existing pricing model. He added that the new pricing model will ease the tension relations between the iron ore suppliers and steel manufacturers. BHP Billiton and Rio Tinto both expressed in 2008 that they will not carry out 200 iron ore pricing in accordance with the original ways. Currently, the two companies are the second and the third iron ore suppliers. The iron ore upper managements revealed that due the deadlock of annual price negotiation, Rio Tinto submit a 20% discount offer to Asia steel manufacturers last month.

Goldman Sachs analysts said on March 17 that because the demand shrinkage of downstream products resulted from the economic crisis, the iron ore price should sink 40% in accordance with the original pricing methods. Barbosa said: "We are more inclined to use the existing pricing way, but the market has proven that there are other feasible ways of pricing. If a customer needs, of course, we will consider other methods of pricing."

Iron ore business principle of BHP Billiton, IanAshby said that Chinese market exists two pricing ways. In the past three years, China had surpassed Japan and became the largest iron ore consumer all over the world. He also pointed out that on May 6 that the conventional iron ore pricing methods is being gradually broken at present. While MariusKloppers stated that the old pricing will make the relations between suppliers and manufacturers in fluctuation.

For more information please visit our website:www.chinametalbiz.com ■

May 21 MetalBiz—On account of the report that China Iron & Steel Association (CISA) has accepted iron ore long-term contract price to cut 30%-35%, CISA secretary-general Shan Shanghua denied this statement in an interview on May 20. He also expressed that China side insists on the price returning back to the level of 2007.

The executive of Vale said that the negotiation will be finished within weeks, while Shan said that the negotiation result can not predict. However, when referring to the progress of the negotiation, he said that China side will not have any contact with the three miners in the following 15 days. It was known that Vale had declared to give up the first negotiation right of 2009 long-term contract price, but recently it has stated the negotiation will complete within weeks. Shan does not understand this version.

Australian and Brazilian ore prices should fall down 45% and 40% respectively

Shan said that on May 21 CISA will issue a statement for some scandals. China side insists on Australian ore long-term contract price should reduce 45% and Brazil should cut 40% price. At present, the iron ore spot price in domestic market is nearly close to the level of 2007.

What do you think of the ore prices? How much it will fall down should be reasonable?

For further information please visit www.chinametalbiz.com

e-mail: info@chinametalbiz.com ■

May 21 MetalBiz—On account of the report that China Iron & Steel Association (CISA) has accepted iron ore long-term contract price to cut 30%-35%, CISA secretary-general Shan Shanghua denied this statement in an interview on May 20. He also expressed that China side insists on the price returning back to the level of 2007.

The executive of Vale said that the negotiation will be finished within weeks, while Shan said that the negotiation result can not predict. However, when referring to the progress of the negotiation, he said that China side will not have any contact with the three miners in the following 15 days. It was known that Vale had declared to give up the first negotiation right of 2009 long-term contract price, but recently it has stated the negotiation will complete within weeks. Shan does not understand this version.

Australian and Brazilian ore prices should fall down 45% and 40% respectively

Shan said that on May 21 CISA will issue a statement for some scandals. China side insists on Australian ore long-term contract price should reduce 45% and Brazil should cut 40% price. At present, the iron ore spot price in domestic market is nearly close to the level of 2007.

What do you think of the ore prices? How much it will fall down should be reasonable?

For further information please visit www.chinametalbiz.com

e-mail: info@chinametalbiz.com ■

MetalBiz—Luo Bingsheng, Administrative Vice-chairman of China Iron & Steel Association (CISA) said on June 2 that significant drops of imported iron ore price is a growing tendency. Chinese steel mills are negotiating with the iron ore suppliers, aimed to make the price return to the level of 2007.

Analysts believe that the goal is in accordance with the steel manufacturer’s requirement that the benchmark price of 2009-2010 should reduce more than 40%.

Because enterprises in other countries of Asia have reached iron ore initial price with Australian mines, analysts think that China side face greater pressure on the condition of deadlock. In view of this, Luo Bingsheng disclosed that the rough situation can not solve any problem and it is very unfavorable for the opposite side to export iron ore to China.

Luo estimates that this year iron ore market will present serious oversupplying situation. Japan and S.Korea and etc. imports sharply decline and Japan reduction may reach 30%, but China still largely imports.

For more information please visit www.chinametalbiz.com ■

MetalBiz—Luo Bingsheng, Administrative Vice-chairman of China Iron & Steel Association (CISA) said on June 2 that significant drops of imported iron ore price is a growing tendency. Chinese steel mills are negotiating with the iron ore suppliers, aimed to make the price return to the level of 2007.

Analysts believe that the goal is in accordance with the steel manufacturer’s requirement that the benchmark price of 2009-2010 should reduce more than 40%.

Because enterprises in other countries of Asia have reached iron ore initial price with Australian mines, analysts think that China side face greater pressure on the condition of deadlock. In view of this, Luo Bingsheng disclosed that the rough situation can not solve any problem and it is very unfavorable for the opposite side to export iron ore to China.

Luo estimates that this year iron ore market will present serious oversupplying situation. Japan and S.Korea and etc. imports sharply decline and Japan reduction may reach 30%, but China still largely imports.

For more information please visit www.chinametalbiz.com ■

MetalBiz--The global steel industry, including Chinese manufacturers, have opposed the consolidation deal between two of the world's largest miners, BHP Billiton and Rio Tinto, on the grounds that it could lead to a monopoly control of major iron ore assets.

On June 5, the two Australia-based companies agreed to set up an iron ore joint venture after Rio Tinto scrapped Chinalco's plan for a $19.5bln investment in the former.

The proposed joint venture would be in command of most of Australian iron ore resources. The deal will see just two suppliers, that is the Australian joint venture and Brazil's Vale, which control 70% of global iron ore trade, industry warned.

The Secretary-General of the China Iron and Steel Association (CISA), Shan Shanghua, was quoted by Caijing magazine as saying that if these large iron ore mines in Australia were concentrated in the hands of one company, then it may lead to a monopoly situation.

"China needs to import almost half of the iron ore it consumes, and the volumes from BHP Billiton and Rio Tinto account for more than half of these imports," he said.

For more information please visit www.chinametalbiz.com ■

MetalBiz--The global steel industry, including Chinese manufacturers, have opposed the consolidation deal between two of the world's largest miners, BHP Billiton and Rio Tinto, on the grounds that it could lead to a monopoly control of major iron ore assets.

On June 5, the two Australia-based companies agreed to set up an iron ore joint venture after Rio Tinto scrapped Chinalco's plan for a $19.5bln investment in the former.

The proposed joint venture would be in command of most of Australian iron ore resources. The deal will see just two suppliers, that is the Australian joint venture and Brazil's Vale, which control 70% of global iron ore trade, industry warned.

The Secretary-General of the China Iron and Steel Association (CISA), Shan Shanghua, was quoted by Caijing magazine as saying that if these large iron ore mines in Australia were concentrated in the hands of one company, then it may lead to a monopoly situation.

"China needs to import almost half of the iron ore it consumes, and the volumes from BHP Billiton and Rio Tinto account for more than half of these imports," he said.

For more information please visit www.chinametalbiz.com ■

June 16 MetalBiz—With Japan and S.Korea enterprises reach 2009 iron ore long-term contract price with Australian and Brazilian mining enterprises, it is more likely to break the negotiation between mining enterprises and China. However, the world largest mining enterprise Vale broke out this scandal and firstly issued a formal statement that it greatly expects to reach 2009 iron ore contract price with China steel enterprises. Shan Shanghua, secretary-general of China Iron & Steel Association (CISA) revealed that China side is negotiating with the three mines

According to the Q1 report of Vale, China market has been the uppermost profit support. Q1 Vale total revenue from China was U.S.$2.423bln, accounted for 44.70% of accumulative revenues.

The data show that China imported iron ore totaled 444mln tons in 2008, accounted for 52% of global iron ore shipments, thereinto, the import from Brazil, Australia and India was about 100mln, 180mln and 90mln tons, occupied 22.5%, 40.5% and 20.3% of total import respectively. If China only reaches annual agreement with Vale, it must hit BHP-Rio under the condition of iron ore demand setback, in a certain degree, it will collapse the strategic relationships of the three iron ore giants.

Hope the result at the end of June will be a satisfying answer.

For more information please visit www.chinametalbiz.com ■

June 16 MetalBiz—With Japan and S.Korea enterprises reach 2009 iron ore long-term contract price with Australian and Brazilian mining enterprises, it is more likely to break the negotiation between mining enterprises and China. However, the world largest mining enterprise Vale broke out this scandal and firstly issued a formal statement that it greatly expects to reach 2009 iron ore contract price with China steel enterprises. Shan Shanghua, secretary-general of China Iron & Steel Association (CISA) revealed that China side is negotiating with the three mines

According to the Q1 report of Vale, China market has been the uppermost profit support. Q1 Vale total revenue from China was U.S.$2.423bln, accounted for 44.70% of accumulative revenues.

The data show that China imported iron ore totaled 444mln tons in 2008, accounted for 52% of global iron ore shipments, thereinto, the import from Brazil, Australia and India was about 100mln, 180mln and 90mln tons, occupied 22.5%, 40.5% and 20.3% of total import respectively. If China only reaches annual agreement with Vale, it must hit BHP-Rio under the condition of iron ore demand setback, in a certain degree, it will collapse the strategic relationships of the three iron ore giants.

Hope the result at the end of June will be a satisfying answer.

For more information please visit www.chinametalbiz.com ■

WorldScrap- LME nickel slumped $600 and ended at $14,400 yesterday, although the warehouse stocks reduced 24 tons to 108,084 tons. As for the spot market, quotations from Changjiang and Shanghai tumbled 1,000RMB and 1,500RMB respectively. In domestic scrap market, stainless steel slipped down 100RMB/T, dragged down by falling price of nickel. The trade was dimmed and most of suppliers watched and waited in the sideline, expecting for a rise in the later market. The supply was sufficient and mills made purchases on demand.

information from WorldScrap.com ■

WorldScrap- LME nickel slumped $600 and ended at $14,400 yesterday, although the warehouse stocks reduced 24 tons to 108,084 tons. As for the spot market, quotations from Changjiang and Shanghai tumbled 1,000RMB and 1,500RMB respectively. In domestic scrap market, stainless steel slipped down 100RMB/T, dragged down by falling price of nickel. The trade was dimmed and most of suppliers watched and waited in the sideline, expecting for a rise in the later market. The supply was sufficient and mills made purchases on demand.

information from WorldScrap.com ■

June 24 MetalBiz—Benxi, Liao Ning province found a large ore reserve, over 3bln tons. According to experts, the type of this deposite is a mixture of magnetite and hematite and iron ore quality is between 25% and 62%. The current 3bln tons is just an estimated number, while its real reserve is likely to be doubled.

Insiders of the industry believe that this iron ore find, plus CISA regulating imported iron ore speculation strongly, which is likely to exert an important role in iron ore negotiation and impose pressure on the three mining enterprises.

Analysts pointed out that no worry to buy ore is a view repeatedly emphasized by CISA in this year’s iron ore negotiation, because iron ore supply is expected to present oversupply of 200mln-300mln tons, plus this new ore reserve, there is no doubt that the favorable supplying position of the three mining enterprises will sharpen. In turn, China side has more confidence in negotiation and adheres to its requirement of 40% reduction.

For more information please visit www.chinametalbiz.com ■

June 24 MetalBiz—Benxi, Liao Ning province found a large ore reserve, over 3bln tons. According to experts, the type of this deposite is a mixture of magnetite and hematite and iron ore quality is between 25% and 62%. The current 3bln tons is just an estimated number, while its real reserve is likely to be doubled.

Insiders of the industry believe that this iron ore find, plus CISA regulating imported iron ore speculation strongly, which is likely to exert an important role in iron ore negotiation and impose pressure on the three mining enterprises.

Analysts pointed out that no worry to buy ore is a view repeatedly emphasized by CISA in this year’s iron ore negotiation, because iron ore supply is expected to present oversupply of 200mln-300mln tons, plus this new ore reserve, there is no doubt that the favorable supplying position of the three mining enterprises will sharpen. In turn, China side has more confidence in negotiation and adheres to its requirement of 40% reduction.

For more information please visit www.chinametalbiz.com ■

Macquarie Securities Group in London believes steel prices should rebound by the end of 2009 from their massive decline during the recession, as Chinese demand picks up, Chinese exports slow and users in the United States and Europe resume buying.

Steel's longer-term outlook remains strong, said Jim Lennon, executive director at Macquarie, citing a slow rebuild of shuttered production capacity outside China relative to demand.

Speaking this week at American Metal Market's Steel Survival Strategies conference, Lennon forecast 2009 world steel demand at 1.214 million tonnes compared with 1.352 million tonnes consumed in 2008. Excluding China, demand should fall 19.9 percent this year to 702 million tonnes.

Biggest user China, should consume far more steel this year than any other region at 511 million tonnes, a 7.6 percent jump above its 475 million tonne demand last year.

China's demand will be 25 to 30 million tonnes higher than actual consumption, because buyers have undergone a heavy inventory restocking after a deep destocking period last year.

'That explains why we can come up with a production number of 540 million tonnes compared with 500 million tonnes last year, despite the fact that it will no longer be exporting 50 million tonnes. But the 540 million has upside rather than downside risk,' the analyst said.

Construction should dominate Chinese demand, with more than half of the total going to that sector. While export-oriented sectors should fall, China's domestic industries, like autos, shipbuilding, railways, oil and gas will all grow, he said.

So far this year, motor vehicle production was up 20 percent, shipbuilding rose 40 percent, and construction activity grew by 10 percent compared with last year.

By contrast, he said, he sees North American steel demand at 88 million tonnes this year, a steep 28.7 percent decline below the 123 million tonnes used in 2008.

Unlike the United States, where little government stimulus money has made it to infrastructure rebuilding, the Chinese government has devoted massive funds to infrastructure.

China's long steel product demand rose most sharply. Through May, it went up 23 percent year-on-year, whereas flat product demand was up only 2 to 3 percent, he said. Output also rose for long products, but fell for flat steel products.

'This suggests demand growth was very much been driven by construction, rather than flat product segments,' he said.

In anticipation of future growth, Lennon said, 'China has realized this is a once-in-a-lifetime opportunity to purchase cheap commodities and raw materials to modernize its economy.'

Imports of raw materials like oil, coal, and iron ore have soared. And it has been restructuring its domestic industries by closing many small, high-cost and dangerous coal and iron ore mines and replacing them with new ones.

'The risk is that when the rest of the world starts to pick up we get a renewed tightness in iron ore again,' said Lennon. ■

Macquarie Securities Group in London believes steel prices should rebound by the end of 2009 from their massive decline during the recession, as Chinese demand picks up, Chinese exports slow and users in the United States and Europe resume buying.

Steel's longer-term outlook remains strong, said Jim Lennon, executive director at Macquarie, citing a slow rebuild of shuttered production capacity outside China relative to demand.

Speaking this week at American Metal Market's Steel Survival Strategies conference, Lennon forecast 2009 world steel demand at 1.214 million tonnes compared with 1.352 million tonnes consumed in 2008. Excluding China, demand should fall 19.9 percent this year to 702 million tonnes.

Biggest user China, should consume far more steel this year than any other region at 511 million tonnes, a 7.6 percent jump above its 475 million tonne demand last year.

China's demand will be 25 to 30 million tonnes higher than actual consumption, because buyers have undergone a heavy inventory restocking after a deep destocking period last year.

'That explains why we can come up with a production number of 540 million tonnes compared with 500 million tonnes last year, despite the fact that it will no longer be exporting 50 million tonnes. But the 540 million has upside rather than downside risk,' the analyst said.

Construction should dominate Chinese demand, with more than half of the total going to that sector. While export-oriented sectors should fall, China's domestic industries, like autos, shipbuilding, railways, oil and gas will all grow, he said.

So far this year, motor vehicle production was up 20 percent, shipbuilding rose 40 percent, and construction activity grew by 10 percent compared with last year.

By contrast, he said, he sees North American steel demand at 88 million tonnes this year, a steep 28.7 percent decline below the 123 million tonnes used in 2008.

Unlike the United States, where little government stimulus money has made it to infrastructure rebuilding, the Chinese government has devoted massive funds to infrastructure.

China's long steel product demand rose most sharply. Through May, it went up 23 percent year-on-year, whereas flat product demand was up only 2 to 3 percent, he said. Output also rose for long products, but fell for flat steel products.

'This suggests demand growth was very much been driven by construction, rather than flat product segments,' he said.

In anticipation of future growth, Lennon said, 'China has realized this is a once-in-a-lifetime opportunity to purchase cheap commodities and raw materials to modernize its economy.'

Imports of raw materials like oil, coal, and iron ore have soared. And it has been restructuring its domestic industries by closing many small, high-cost and dangerous coal and iron ore mines and replacing them with new ones.

'The risk is that when the rest of the world starts to pick up we get a renewed tightness in iron ore again,' said Lennon. ■

Japan aims to take advantage of a price decline to roughly double its national stockpile of minor metals, but it does not expect its purchases to be a factor in driving up prices in the long term given current slow demand and high stocks.

The move is part of a broad review of the nation's stockpile, set up in 1983, which will add two new metals -- indium and gallium -- to the seven currently held.

Japan has earmarked 5.8 billion yen ($60.68 million) from this year's budget to buy and boost its stockpile to an average of 42 days worth of metal, a target it has always had but never achieved due to worries that buying at a high price would disrupt the market. It currently has an average 19.5 days worth of metal in the stockpile. "It would be timely to buy now because prices have come down," Yoshinori Yajima, director at the Ministry of Economy, Trade and Industry's Mineral and Natural Resources Division, said in an interview with Reuters. ■

Japan aims to take advantage of a price decline to roughly double its national stockpile of minor metals, but it does not expect its purchases to be a factor in driving up prices in the long term given current slow demand and high stocks.

The move is part of a broad review of the nation's stockpile, set up in 1983, which will add two new metals -- indium and gallium -- to the seven currently held.

Japan has earmarked 5.8 billion yen ($60.68 million) from this year's budget to buy and boost its stockpile to an average of 42 days worth of metal, a target it has always had but never achieved due to worries that buying at a high price would disrupt the market. It currently has an average 19.5 days worth of metal in the stockpile. "It would be timely to buy now because prices have come down," Yoshinori Yajima, director at the Ministry of Economy, Trade and Industry's Mineral and Natural Resources Division, said in an interview with Reuters. ■

June 30, the deadline for iron ore long-term contract, while the negotiation between China side and the three mining giants has no outcome. Based on China side strong attitude towards more reduction, Rio Tinto, the global second largest iron ore producer, said on June 30 that most supplying contract will be transferred to spot pricing from July 1.

The annual iron ore long-term contract pricing mechanism as conventions has been followed by buyers and sellers for 40 years around. This pricing method has firstly presented crack last year, but this year it is going to disappear. Rio Tinto, as the representative of buyers, firstly has not signed contract with most customers before June 30 for 20 years.

Gervase Greene, the spokesman of Rio Tinto revealed that it has been supporting long-term contract pricing mechanism for long time, but if customers choose to buy iron ore on spot market, it will conform to the requirement of customers.

Jpmorgan published forecast last month that to give up annual long-term contract pricing mechanism will add the fluctuation of benefit for Rio Tinto. However, Rio Tinto disclosed on June 1 that its half iron ore was sold on spot market.

China surpassed Japan in 2003, became the largest iron ore consumer. Prior to this, every year’s iron ore long-term contract price is set by Japan and European steel enterprises. In the fiscal year of 2007, China as the leading buyer firstly conclude a 9.5% cut with the Vale.

For more information please visit www.chinametalbiz.com ■

June 30, the deadline for iron ore long-term contract, while the negotiation between China side and the three mining giants has no outcome. Based on China side strong attitude towards more reduction, Rio Tinto, the global second largest iron ore producer, said on June 30 that most supplying contract will be transferred to spot pricing from July 1.

The annual iron ore long-term contract pricing mechanism as conventions has been followed by buyers and sellers for 40 years around. This pricing method has firstly presented crack last year, but this year it is going to disappear. Rio Tinto, as the representative of buyers, firstly has not signed contract with most customers before June 30 for 20 years.

Gervase Greene, the spokesman of Rio Tinto revealed that it has been supporting long-term contract pricing mechanism for long time, but if customers choose to buy iron ore on spot market, it will conform to the requirement of customers.

Jpmorgan published forecast last month that to give up annual long-term contract pricing mechanism will add the fluctuation of benefit for Rio Tinto. However, Rio Tinto disclosed on June 1 that its half iron ore was sold on spot market.

China surpassed Japan in 2003, became the largest iron ore consumer. Prior to this, every year’s iron ore long-term contract price is set by Japan and European steel enterprises. In the fiscal year of 2007, China as the leading buyer firstly conclude a 9.5% cut with the Vale.

For more information please visit www.chinametalbiz.com ■

China's largest steel maker Baoshan Iron & Steel Co announced Wednesday to raise ex factory prices of some carbon steel products by CNY 150 to CNY 200 per tonne for August, but keep its billet and seamless tube prices unchanged. This is the second time Baosteel has raised its carbon steels prices since it lifted July prices in June.

Baosteel has adjusted up its ship plate price by CNY 150 per tonne and the price of carbon wide thick plate by CNY 200 per tonne for the next month. However, the company hasn't covered its mainstream products such as hot-rolled steels and cold-rolled steels in the price adjustment list this time.

An official with Baosteel told the reporter that its August prices of mainstream products will be announced later to get closer to the market prices by then. ■

China's largest steel maker Baoshan Iron & Steel Co announced Wednesday to raise ex factory prices of some carbon steel products by CNY 150 to CNY 200 per tonne for August, but keep its billet and seamless tube prices unchanged. This is the second time Baosteel has raised its carbon steels prices since it lifted July prices in June.

Baosteel has adjusted up its ship plate price by CNY 150 per tonne and the price of carbon wide thick plate by CNY 200 per tonne for the next month. However, the company hasn't covered its mainstream products such as hot-rolled steels and cold-rolled steels in the price adjustment list this time.

An official with Baosteel told the reporter that its August prices of mainstream products will be announced later to get closer to the market prices by then. ■

21st Century Business Herald reported that seel mills in Hebei Tangshan, the biggest steel production city in China rush to production and postpone overhauls in view of the returning steel market and rising steel prices.

Annual steel production capacity in local stays above 50 million tonnes or makes up one tenth of China's total capacity. And local mills mainly medium and small sized ones are mainly engage in rebar and wire rod production.

Though flexible in operation, these smaller mills also bear the brunt of the global financial crisis. Mills idling or cutting production takes up two thirds of total mills in local in the Q1 of this year. However, the recovering steel market since April brings an opportunity for these mills. Stimulated by the CNY 4 trillion stimulus packages, demand for construction materials picks up like rebar and wire rod the major steel products produced in local. ■

21st Century Business Herald reported that seel mills in Hebei Tangshan, the biggest steel production city in China rush to production and postpone overhauls in view of the returning steel market and rising steel prices.

Annual steel production capacity in local stays above 50 million tonnes or makes up one tenth of China's total capacity. And local mills mainly medium and small sized ones are mainly engage in rebar and wire rod production.

Though flexible in operation, these smaller mills also bear the brunt of the global financial crisis. Mills idling or cutting production takes up two thirds of total mills in local in the Q1 of this year. However, the recovering steel market since April brings an opportunity for these mills. Stimulated by the CNY 4 trillion stimulus packages, demand for construction materials picks up like rebar and wire rod the major steel products produced in local. ■

In response to the recent news prevailed in the market that iron ore negotiation outcome has been determined, the principal of China Iron & Steel Association (CISA) made it clear that the final result has not been sure. The principal of Hebei Iron & Steel said that the annual iron ore price negotiation between China side and iron ore suppliers will have a result soon, but he did not reveal the detailed time.

People close to the negotiation disclosed that China side may accept Nippon’s initial price, that is, 33% reduction, but the pricing model needs to be changed and may carry out half-yearly pricing, while, the principal of Heber Iron & Steel does not admit this pricing model.

Roger Agneli, CEO of Vale, one of the three mines said as for the negotiation, which has not concluded with China side, he pointed out that the benchmark has been determined. Customers choose what they want and China also selects what they expect. He also said that Vale did not insist on operation on spot market, but it is willing to deliver goods with the ways what customers want.

According to the reporters, currently three mines will decrease the investment in domestic spot market in the following two months. Mines said they need guarantee the supply of long-term contract consumers in the future, because since Q4 last year, the domestic steel mills had stopped the purchase with the long-term contract but turned into spot market. The present spot price is basically in line with the long-term contract ore.

For more information please visit www.chinametalbiz.com ■

In response to the recent news prevailed in the market that iron ore negotiation outcome has been determined, the principal of China Iron & Steel Association (CISA) made it clear that the final result has not been sure. The principal of Hebei Iron & Steel said that the annual iron ore price negotiation between China side and iron ore suppliers will have a result soon, but he did not reveal the detailed time.

People close to the negotiation disclosed that China side may accept Nippon’s initial price, that is, 33% reduction, but the pricing model needs to be changed and may carry out half-yearly pricing, while, the principal of Heber Iron & Steel does not admit this pricing model.

Roger Agneli, CEO of Vale, one of the three mines said as for the negotiation, which has not concluded with China side, he pointed out that the benchmark has been determined. Customers choose what they want and China also selects what they expect. He also said that Vale did not insist on operation on spot market, but it is willing to deliver goods with the ways what customers want.

According to the reporters, currently three mines will decrease the investment in domestic spot market in the following two months. Mines said they need guarantee the supply of long-term contract consumers in the future, because since Q4 last year, the domestic steel mills had stopped the purchase with the long-term contract but turned into spot market. The present spot price is basically in line with the long-term contract ore.

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Overseas media reported on July 15 that China steel enterprises had quietly accepted the Rio-BHP’s agreement on iron ore 33% price reduction.

In response to this scandal, the related officials of China Iron & Steel Association (CISA) said that he had not heard of it and pointed out this version was not true. AmandaBuckley, the media departments in Australian headquarter of Rio Tinto, said in an interview on July 15 that he did not comment on iron ore negotiation.

According to foreign media reports, most steel enterprises had accepted half-yearly contracts and most are one-year contracts, as well as CISA would not public the reached agreement with Australian mines

On account of the above media report, the insiders of public relations department of Baosteel said in an interview that CISA had not released the outcome of negotiation and Baosteel as well as enterprises participating talks also had not issued the related statement, therefore, it is worth doubting that China’ s steel enterprises have accepted 33% price cut. Bond department insider of Baosteel also said he has not received the notice related to the negotiation result.

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Overseas media reported on July 15 that China steel enterprises had quietly accepted the Rio-BHP’s agreement on iron ore 33% price reduction.

In response to this scandal, the related officials of China Iron & Steel Association (CISA) said that he had not heard of it and pointed out this version was not true. AmandaBuckley, the media departments in Australian headquarter of Rio Tinto, said in an interview on July 15 that he did not comment on iron ore negotiation.

According to foreign media reports, most steel enterprises had accepted half-yearly contracts and most are one-year contracts, as well as CISA would not public the reached agreement with Australian mines

On account of the above media report, the insiders of public relations department of Baosteel said in an interview that CISA had not released the outcome of negotiation and Baosteel as well as enterprises participating talks also had not issued the related statement, therefore, it is worth doubting that China’ s steel enterprises have accepted 33% price cut. Bond department insider of Baosteel also said he has not received the notice related to the negotiation result.

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After continuous drops for half-month, Baltic Dry Freight Index (BDI) stopped sinking to rebound. On July 15, BDI sharply increased 227 points, ended with 3,324 points. Several insiders of shipping trade pointed out that it is expected that China’ s iron ore talks is going to close and China will significantly import iron ore to propel BDI rise.

Since this year, driven by the freight of Capesize mainly shipping iron ore, BDI experienced a round of quick rebounding and set H2 new record high with 4,291 points on June 3, rebounded nearly 500% compared with the lowest level in Dec. last year.

The insiders of China Shipping believed that the recent rebounding of BDI may be affected by the closing iron ore negotiation. The market participants thought that after iron ore price talks end, China will continue largely import iron ore and the shipping demand is still stable. In addition, scandals that even if at the level of 3,000 points around, most ship-owners still seal up for keeping freight to prop BDI tendency.

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After continuous drops for half-month, Baltic Dry Freight Index (BDI) stopped sinking to rebound. On July 15, BDI sharply increased 227 points, ended with 3,324 points. Several insiders of shipping trade pointed out that it is expected that China’ s iron ore talks is going to close and China will significantly import iron ore to propel BDI rise.

Since this year, driven by the freight of Capesize mainly shipping iron ore, BDI experienced a round of quick rebounding and set H2 new record high with 4,291 points on June 3, rebounded nearly 500% compared with the lowest level in Dec. last year.

The insiders of China Shipping believed that the recent rebounding of BDI may be affected by the closing iron ore negotiation. The market participants thought that after iron ore price talks end, China will continue largely import iron ore and the shipping demand is still stable. In addition, scandals that even if at the level of 3,000 points around, most ship-owners still seal up for keeping freight to prop BDI tendency.

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A few days ago, Shougang did not conclude the Susan Palmer Deposit Project Agreement with Australasian in Pilbara area, therefore, it lost the right in providing assets for this project by its own. After ending the agreement, Australasian will continue negotiating with Shougang without agreement, at the same time, it will also negotiate with other investors.

The well-informed person revealed that Shougang insists on the shareholding of this project, which did not be accepted, further resulted in the breakage of the final talks.

In March 2007, Shougang invested AUD56mln in iron ore project’s research by way of buying 12.8% shares. At that time, the both sides reached the common ground that if Shougang chooses to participating this project’ s development, it will take on the whole exploitation cost of U.S.$2.7bln and also promise to purchase all iron ore produced in this project. Australasian owns the exploitation right of 1bln tons iron ore in the southern Balmoral of Pilbara.

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A few days ago, Shougang did not conclude the Susan Palmer Deposit Project Agreement with Australasian in Pilbara area, therefore, it lost the right in providing assets for this project by its own. After ending the agreement, Australasian will continue negotiating with Shougang without agreement, at the same time, it will also negotiate with other investors.

The well-informed person revealed that Shougang insists on the shareholding of this project, which did not be accepted, further resulted in the breakage of the final talks.

In March 2007, Shougang invested AUD56mln in iron ore project’s research by way of buying 12.8% shares. At that time, the both sides reached the common ground that if Shougang chooses to participating this project’ s development, it will take on the whole exploitation cost of U.S.$2.7bln and also promise to purchase all iron ore produced in this project. Australasian owns the exploitation right of 1bln tons iron ore in the southern Balmoral of Pilbara.

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On July 20, WISCO and Australian CXM (CentrexMetals) signed cooperative development agreement on iron ore project in South Australia. It is learned that after approved by the both sides’ government, the agreement will be formally carried out.

This cooperation of both paties involved stock acquisition, mining right purchase, exploration cooperation, JV company’s establishment, etc. As for the stock acquisition, CXM listed company will be directional 15% of shares to WISCO. After the acquisition, WISCO will become CXM second largest shareholder, owing a position of board member in CXM. Additionally, according to the determined unit price, that is, AUD 0.18 per ton, WISCO totally paid AUD 216mln and gained 60% of interests. The both side will also implement the exploration, development and construction in the special mine area of CXM through joint investment.

Australian CXM is a listed company in Australia, owing many high-quality mines in South Australia. The both side will co-develop the iron ore project in Middle and South of Eyre Peninsula in South Australia. According to the introduction, the cooperative minng area was made up of 5 lease parts, covering an area of 600 square kilometers. It is predicted that the total resource can reach over 2bln tons, with the quality of 30% around and by magnetic separation, 65% of iron concentrate can be got.

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On July 20, WISCO and Australian CXM (CentrexMetals) signed cooperative development agreement on iron ore project in South Australia. It is learned that after approved by the both sides’ government, the agreement will be formally carried out.

This cooperation of both paties involved stock acquisition, mining right purchase, exploration cooperation, JV company’s establishment, etc. As for the stock acquisition, CXM listed company will be directional 15% of shares to WISCO. After the acquisition, WISCO will become CXM second largest shareholder, owing a position of board member in CXM. Additionally, according to the determined unit price, that is, AUD 0.18 per ton, WISCO totally paid AUD 216mln and gained 60% of interests. The both side will also implement the exploration, development and construction in the special mine area of CXM through joint investment.

Australian CXM is a listed company in Australia, owing many high-quality mines in South Australia. The both side will co-develop the iron ore project in Middle and South of Eyre Peninsula in South Australia. According to the introduction, the cooperative minng area was made up of 5 lease parts, covering an area of 600 square kilometers. It is predicted that the total resource can reach over 2bln tons, with the quality of 30% around and by magnetic separation, 65% of iron concentrate can be got.

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On July 22, BHP Billiton, the world largest mining company released the financial report of 2009, thereinto, the output in the last quarter (April-June this year) was only 27.04mln tons, dropped 10% y-o-y and 4% m-o-m. This number greatly differed with the figure of Rio Tinto’s, an 8% increase.

BHP Billiton said that the fiscal year of 2009 is very challenging for it, because the global demands apparently shrinked and inventories also changed. Therefore, the company adjusted a series of products’s production. BHP Billiton’s iron ore output reached 114.4mln tons, up 2% y-o-y, but it is far below the expected production, 130mln tons. Especially in April-June, the output presented obvious drops.

BHP Billiton pointed out that this phenomenon resulted from a series of accidents happened in Pilbara area.

However, not long ago, Rio Tinto released that its iron ore production was 45.2mln tons in Q2 this year, up 8% y-o-y, which greatly surpassed the expectation of the industry.

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On July 22, BHP Billiton, the world largest mining company released the financial report of 2009, thereinto, the output in the last quarter (April-June this year) was only 27.04mln tons, dropped 10% y-o-y and 4% m-o-m. This number greatly differed with the figure of Rio Tinto’s, an 8% increase.

BHP Billiton said that the fiscal year of 2009 is very challenging for it, because the global demands apparently shrinked and inventories also changed. Therefore, the company adjusted a series of products’s production. BHP Billiton’s iron ore output reached 114.4mln tons, up 2% y-o-y, but it is far below the expected production, 130mln tons. Especially in April-June, the output presented obvious drops.

BHP Billiton pointed out that this phenomenon resulted from a series of accidents happened in Pilbara area.

However, not long ago, Rio Tinto released that its iron ore production was 45.2mln tons in Q2 this year, up 8% y-o-y, which greatly surpassed the expectation of the industry.

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According to the sources, He Yafei, assistant minister of China’ s Foreign Ministry, said on July 22 that he had met Stephen Smith, minister of Australian Foreign Ministry in recent and expressed that China has sufficient evidence to prove that Rio Tinto’ s employees had acquired China’ s confidential documents by illegal means.

It is reported that He Yafei had introduced the case to Stephen Smith and stressed that China side had sufficient evidence to prove that the key people involved gained the China’ s confidential document by illegal means. He said in a press conference that this case has gone to judicial procedures, added he had informed Stephen Smith China side will try its best to make it, but this case must perform the whole judicial procedure at first.

He Yafei met Simth in a meeting in Egypt last week. He showed Smith that Rio Tinto case does not affect the relationship between China and Australia. He Yafei disclosed that China side does not expect such thing to happen again and believes that Australia side will regard this case as the individual case to cope with.

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According to the sources, He Yafei, assistant minister of China’ s Foreign Ministry, said on July 22 that he had met Stephen Smith, minister of Australian Foreign Ministry in recent and expressed that China has sufficient evidence to prove that Rio Tinto’ s employees had acquired China’ s confidential documents by illegal means.

It is reported that He Yafei had introduced the case to Stephen Smith and stressed that China side had sufficient evidence to prove that the key people involved gained the China’ s confidential document by illegal means. He said in a press conference that this case has gone to judicial procedures, added he had informed Stephen Smith China side will try its best to make it, but this case must perform the whole judicial procedure at first.

He Yafei met Simth in a meeting in Egypt last week. He showed Smith that Rio Tinto case does not affect the relationship between China and Australia. He Yafei disclosed that China side does not expect such thing to happen again and believes that Australia side will regard this case as the individual case to cope with.

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The world steel industry is recovering from the largest collapse since the second World War. Currently Vale, the world largest iron ore manufacture, refused the price cut requirement of China.

Last month, Vale agreed to reduce 28% to Japan’ s steel mills in the annual agreement, which is the first time to cut the price for seven years, while China side has been seeking for 45% discount. Since the initial contract determined this year, the iron ore price increased 38% on the spot market, which weakened China’s position in the negotiation. Roger Agnelli, CEO of Vale said on July 25 that he would not give a large discount in this negotiation, which lasted for a longest time historically. The report of McKinsey pointed out that China detained Rio Tinto’ s executives and accused them of involving espionage, which made the relationship between Australia and China broken, but may in favor of Vale.

Paul Cliff, mining analyst from Nomura Securities’s in London said in an interviewing on July 22 that it is less likely for China steel manufacturers to gain more discount, added China either agrees the current benchmark price or purchase iron ore from the spot market. This year, Vale’s sales increased 35% in Sao Paulo, at the same time, the stock also grew 45%. In London, Rio Tinto rose 97%, but the sales volume of BHP Billiton, the world largest iron ore exporter just increased 23%.

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The world steel industry is recovering from the largest collapse since the second World War. Currently Vale, the world largest iron ore manufacture, refused the price cut requirement of China.

Last month, Vale agreed to reduce 28% to Japan’ s steel mills in the annual agreement, which is the first time to cut the price for seven years, while China side has been seeking for 45% discount. Since the initial contract determined this year, the iron ore price increased 38% on the spot market, which weakened China’s position in the negotiation. Roger Agnelli, CEO of Vale said on July 25 that he would not give a large discount in this negotiation, which lasted for a longest time historically. The report of McKinsey pointed out that China detained Rio Tinto’ s executives and accused them of involving espionage, which made the relationship between Australia and China broken, but may in favor of Vale.

Paul Cliff, mining analyst from Nomura Securities’s in London said in an interviewing on July 22 that it is less likely for China steel manufacturers to gain more discount, added China either agrees the current benchmark price or purchase iron ore from the spot market. This year, Vale’s sales increased 35% in Sao Paulo, at the same time, the stock also grew 45%. In London, Rio Tinto rose 97%, but the sales volume of BHP Billiton, the world largest iron ore exporter just increased 23%.

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China Iron & Steel Association (CISA) held a two-day meeting from July 29 and people all paid attention to the statement of China side on iron ore price and position. With the price rising of spot ore, the inside upper management personnel and analysts estimated that CISA may announce a compromise proposal, such as the mixed pricing. In addition, the mainland media reported that presently CISA is speeding up the relevant rules for iron ore import qualification, involving the licensed steel enterprises of 70 and traders of 42.

In the meeting, which held once a half of year and attended the executive members of CISA, it is estimated that the agenda of steel enterprises’ profitableness in H1 and oversupply may take a back place. The outside world paid attention to China’s statement on iron ore price and position. Reuters reported that the steel enterprises and upper management personnel of CISA, who attended the meeting on July 29, did not give positive answers on iron ore negotiation process.

The upper management from Tanggang told the reporters before attending the meeting that he was less clear about the latest process of iron ore negotiation, while the insiders of Shougang and Ansteel unanimously declared they had sent special men to participate in the negotiation but not know much about the concrete development.

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China Iron & Steel Association (CISA) held a two-day meeting from July 29 and people all paid attention to the statement of China side on iron ore price and position. With the price rising of spot ore, the inside upper management personnel and analysts estimated that CISA may announce a compromise proposal, such as the mixed pricing. In addition, the mainland media reported that presently CISA is speeding up the relevant rules for iron ore import qualification, involving the licensed steel enterprises of 70 and traders of 42.

In the meeting, which held once a half of year and attended the executive members of CISA, it is estimated that the agenda of steel enterprises’ profitableness in H1 and oversupply may take a back place. The outside world paid attention to China’s statement on iron ore price and position. Reuters reported that the steel enterprises and upper management personnel of CISA, who attended the meeting on July 29, did not give positive answers on iron ore negotiation process.

The upper management from Tanggang told the reporters before attending the meeting that he was less clear about the latest process of iron ore negotiation, while the insiders of Shougang and Ansteel unanimously declared they had sent special men to participate in the negotiation but not know much about the concrete development.

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