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BHP settles half of iron ore contracts
Sydney (AFP) July 29, 2009 Anglo-Australian mining giant BHP Billiton on Wednesday said it had settled half its controversial iron ore contracts, with one-quarter of customers agreeing to cuts of between 33 and 44 percent. The company said it had agreed to sell 23 percent of its volume through contracts and 30 percent through a mix of quarterly negotiated pricing, spot market and index-based pricing. It did not detail which countries the settled contracts were from, but analysts said it appeared they were Japanese or Korean steel mills, who have both indicated previously they were happy with the cuts. The fact that 47 percent of the contracts remained under negotiation, which reflected China's share of the company's iron ore exports, seemed to support this view, Dow Jones Newswires said. "BHP Billiton has settled 23 percent of total iron ore volumes at an agreed annual contract price," it said in a statement. It said price for iron ore fines would be 33 percent lower than the previous year's benchmark, with iron ore lump down 44 percent. The current round of negotiations has been mired in controversy, with the arrest in Shanghai of Rio Tinto executive Stern Hu sparking a diplomatic row between Australia and China. Macquarie Equities analyst Brendan Harris said BHP's update appeared to indicate the stalemate between the major miners and Chinese steel mills was ongoing, with talks dragging on long past the June 30 deadline. BHP said it believed the agreements, representing a significant shift to more varied and flexible pricing, were indicative of "continued progress towards transparent market pricing." BHP and Rio have denied shipments to China have been disrupted by the arrest of Hu, who is accused of bribery during the iron ore talks, offences Beijing say relate to spying and stealing state secrets. Hu was lead negotiator for Rio, the world's third-largest miner, in the talks with China to set iron ore prices for the coming year. China, the world's biggest consumer of iron, has indicated negotiations are continuing despite the arrest. Share This Article With Planet Earth
Related Links Global Trade News
Taiwan leader calls for China trade pact but no rush to meet HuTaipei (AFP) July 29, 2009 Taiwan's President Ma Ying-jeou on Wednesday called for a trade pact with China but said he was not likely to meet his Chinese counterpart soon despite warming ties between the former bitter rivals. In an interview with the Taipei-based United Evening News, Ma said the two sides had been building mutual trust since he came to power last year. "However, the icy ties are just beginning to ... read more |
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