BlueScope Steel: BHP Iron Ore Price Index Working Well
October 13 2009 - 5:55AM
Dow Jones News
Australia's BlueScope Steel Ltd. (BSL.AU), one of the pioneers
of a hybrid pricing system for iron ore, said Tuesday its iron ore
price index, developed by Anglo-Australian miner BHP Billiton Ltd.
(BHP), was working well since its introduction about a year
ago.
Speaking on the sidelines of the World Steel Association's
annual conference, BlueScope's managing director and chief
executive Paul O'Malley said the system's prices, which change
quarterly, were a hybrid of spot and index prices as well as
benchmark rates. It is available only to BlueScope and not
otherwise provided for general consumption.
BHP has been pushing Chinese steelmakers to accept a similar
index, and some mills are said to have agreed to its use, though
the system has yet to win the official blessing of the China Iron
and Steel Association.
The association leads Chinese mills in annual iron ore benchmark
price negotiations that set one rate for a contract year. The talks
collapsed last year amid spying charges and arrests. The
controversy moved the focus to BHP's hybrid index as a possible
option.
-By Chuin-Wei Yap; Dow Jones Newswires; (8610) 6588 5848;
chuin-wei.yap@dowjones.com