Sionsteel Corp, China's second-biggest iron-ore trading company,
expects the contract price for the steel-making ingredient to gain
25 percent next year, driven by increased demand, a company
executive said yesterday.
"China's demand is unstoppable," Wang Hongsen, managing director
at the company's Indian unit, said yesterday in New Delhi. Wang had
forecast a five-percent price gain in May. "Supply continues to lag
demand," Wang said.
Mining companies, including BHP Billiton Ltd, the world's
largest, and their customers begin annual contract talks this month
to settle the price of ore shipments from April.
Wang's forecast is less than the 30-percent gain in the price
estimated in a Bloomberg News survey of eight analysts last
month.
Rising demand from China, the world's largest steel user, has
pushed iron ore prices to a record for five years. India is the
second-biggest supplier of the ore to China, providing a quarter of
total imports.
"Demand is so strong that we have seen prices rise sharply in
the spot market," S.B. Chauhan, an adviser to the Federation of
Indian Mineral Industries, said from New Delhi. "Buyers are willing
to pay a premium to lock in supplies."
Spot prices, which are determined on a single-cargo basis, have
reached US$185 a ton, according to Credit Suisse Group on September
28. That compares with the 2007 benchmark Australian price for
long-term contracts of US$51.47 a ton.
(Shanghai Daily October 11, 2007)
