China's largest steel company, Baosteel Group, is likely to
conclude talks on iron ore prices this month, Monday's China
Securities Journal reported, amid reports that Japan's Nippon
Steel had agreed a 65-percent price rise with one of the three main
suppliers.
Quoting Baosteel chairman Xu Lejiang, who declined to comment on
the iron ore import price for 2008, the report gave no indication
of the outcome of the talks.
However, it cited a source familiar with the negotiations as
saying costs would rise by 65 percent over last year with details
to be published on Monday or Tuesday.
Baosteel has been negotiating on behalf of China's steel
industry since December last year with major global iron ore
providers, including BHP Billiton, Rio Tinto and CVRD.
BHP Billiton, announced on Jan. 30 that it had signed a 10-year
deal to supply Baosteel with an additional 94 million tons of iron
ore.
In late 2006, Chinese steel makers agreed with major providers
on a 9.5-percent price rise for iron ore imports for 2007. The
lower-than-expected increase was deemed a success for Chinese
buyers.
China, the world's largest steel producer and consumer, imported
383 million tons of iron ore in 2007, up 56.8 million tons or 17.4
percent year on year, according to the China Iron and Steel
Association.
China is expected to eliminate 100 million tons of iron
production capacity and 55 million tons of steel production
capacity by 2010.
The association figures show that 55 percent of the imported
iron ore in 2007 was for producing export-oriented steel
products.
"Domestic demand growth for pig iron will probably drop from
14.11 percent in the second half of 2007 to 12 percent in 2008 and
exports of iron and steel products by domestic manufacturers are
expected to decrease by 20 million tons this year," said Luo
Bingsheng, vice chairman of the association last month. The Chinese
Customs figures showed that the country's steel export stood at
4.14 million tons in January, down 5.4 percent year on year.
(Xinhua News Agency February 18, 2008)
