2011 iron ore negotiations began to sea freight into a focus

Abstract After eight years of iron ore negotiations, the dust has finally settled in the three major mining companies to push the index pricing. It has been learned from the China Iron Ore Negotiation Group that has just returned from Australia that the change pricing mechanism has not been included in the theme of the 2011 actual negotiations, on sea freight and prices...

After eight years of iron ore negotiations, the dust settled in the three major mining companies to push the index pricing. It has been learned from the China Iron Ore Negotiation Group that has just returned from Australia that the change pricing mechanism has not been included in the theme of actual negotiations in 2011, and the control of sea freight and price index information has become the focus of a new round of competition.

The members of the group said that from the content of the negotiations, the index-based quarterly pricing model has been recognized by both parties, and the China Iron and Steel Association does not blindly emphasize the need to change it. However, according to the current offshore pricing method for iron ore, the sea freight that fluctuates between US$6 and US$100 per ton is not included in the contract price, which makes it difficult for Chinese steel mills to bear.

It is understood that the three major mining companies have basically monopolized about 70% of the world shipping market. The lesson from previous years is that sea freight rates usually fall sharply during iron ore negotiations, and once the price is signed, sea freight rates will rise sharply, and the cost of steel mills will increase substantially.

Not only that, the three major mining companies have also begun to affect the collection of domestic iron ore price information and the preparation of the index.

Every change in the pricing system will change the operating track of Chinese steel companies to a certain extent, and the strong position of the three major mining companies will be difficult to change.

 

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