Iron Ore Miners Won't Accept 40% Price Cut For China -Source
May 20 2009 - 9:57PM
Dow Jones News
Global iron ore miners won't agree to Chinese demands for a
40%-50% cut in iron ore benchmark prices versus last year's terms,
a person familiar with the ongoing price negotiations said late
Wednesday.
He said it's more likely the three mining majors, Companhia Vale
do Rio Doce (RIO), Rio Tinto PLC (RTP) and BHP Billiton Ltd. (BHP),
will first settle price cuts - estimated at 30%-35% - with Korean
and Japanese mills, which could then pave the way for a compromise
with China.
"You can be pretty sure the miners won't accept 40%-50%," the
person said.
Talks for fresh price terms have dragged well past their April 1
deadline.
The person portrayed the Chinese side in the annual talks as
torn by two factions, with the more hardline voices now
dominant.
"The Chinese are not being overly reasonable," the person said.
"They like to fire off, and they like to say this is unacceptable
and that is unacceptable. (But) they are conflicted...behind the
scenes there is a smarter, more market-oriented set."
-By Chuin-Wei Yap, Dow Jones Newswires; 8610 6588 5848;
chuin-wei.yap@dowjones.com