Eurofer demands probe into miners' iron ore pricing

08:38, March 23, 2010      

Email | Print | Subscribe | Comments | Forum 

Iron ore negotiations this year are fraught with complications after global mining companies, including Rio Tinto, BHP Billiton and Brazil's Vale signaled an 80-100 percent price surge in prices of the raw material.

Unable to find reasons to justify the price rise demanded by the companies, Eurofer, the European steel industry body, may ask competition authorities in Brussels this week to probe the anti-competitive behavior in the iron ore market, the Financial Times reported Monday.

"We believe that it could be evidence of anti-competitive behavior and even coordinate price behavior in the iron ore market, but it is up to the relevant authorities to determine this," Gordon Moffat, Eurofer director general, told the paper. "We think the authorities should see whether there is a cartel in the iron ore market."

Moreover, Eurofer also plans to suggest Brussels' competition watchdog expand its investigation into the Rio Tinto-BHP Billiton joint venture to include pricing behavior.

Three key mining companies – Vale, Rio Rinto and BHP Billiton – control about 70 per cent of the world's sea-borne ore market, and seek to move away from a decades-old annual benchmark price system, which had been one of the most important commodity price negotiations.

Betting on the booming demand in markets, the companies have aimed to offer the widely used and key infrastructure material at prices beyond what steel mills could endure.

China's major steel mills said that price hikes being mooted by the three are unacceptable and would put most of the country's steel industry in the red.

However, Japan seems close to tentative deals to adopt short-term contracts linked to the spot market, the Financial Times reported separately.

"There is an understanding on both sides to move to quarterly pricing," the newspaper quoted a senior executive involved in the talks as saying.

A metals trading source said Japan agreed to the change because it is more concerned with supply security than prices and ready to concede annual contracts to guarantee tonnages over 12 months.

Spot iron ore prices are trading at more than twice the level of the 2009 benchmark.

Source: Global Times
  • Do you have anything to say?

双语词典
dictionary

  
Special Coverage
Major headlines
Editor's Pick
  • Houston Rockets vs LA Clippers: 93-99
  • Stunning beauty of dotted lake in Canada
  • Different way to see things -- X-ray vision
  • First tyrannosaur rex bone discovered in southern hemisphere
  • Artist's impression: nuclear bombing
  • Russian bombers "intercepted in British airspace"
Most Popular
Hot Forum Dicussion