Backgrounder: Iron ore price negotiations in recent years

11:28, April 29, 2010      

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2005
Following China, Japan's Nisshin Iron reached agreement on initial price with Rio Tinto Australia from November 2004 to February 2005. Thereafter, fine ore and lump ore prices increased 71.5 percent.

2006
Shanghai Bao Steel reached agreement on initial price with BP Billiton of Australia for the period from November 2005 to June 2006. Afterwards fine ore and lump ore prices increased 19 percent.

2007
Shanghai Bao Steel reached agreement on initial price with CVRD of Brazil from November 2006 to December 2006. Thereafter, fine ore and lump ore prices increased 9.5 percent.

2008
Following China, Japan's Nisshin Iron, CVRD of Brazil and South Korea's POSCO reached agreement on initial price with each other during the period from November 2007 to February 200,.
Thereafter, fine ore and lump ore prices increased 65 percent. Rio Tinto Australia, however, denied this agreement, which forced Shanghai Bao Steel to re-establish a long period association price with Rio Tinto. This means the "unconditional follow" mode was terminated.

2009
Japan's Nisshin Iron reached agreement on initial price with Rio Tinto Australia during the period from November 2008 to May 2009. Thereafter, fine ore prices decreased 33 percent while lump ore prices fell 44 percent. China, however, declined to follow the agreement and reached another agreement on price with FMG Australia with a 35 percent decrease of fine ore prices and a 50 percent decline of lump ore prices. The three largest mine companies, nevertheless, said no to this price. Therefore, the annual iron ore negotiation ended without results.

By People's Daily Online

(Editor:祁澍文)

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