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BEIJING/SHANGHAI, May 29 Reuters - Chinese steel mills have decided to accept a 19 percent price hike for iron ore, putting an end to months of negotiations with the world's top miners, including Brazil's CVRD, industry sources said late on Monday.

The sources said the decision came after a Beijing meeting of the country's top 16 mills, headed by Baosteel Group.

This would put Chinese mills in line with top steel makers around the world, including Arcelor and South Korea's POSCO, which have already accepted the 19 percent price rise first settled by ThyssenKrupp AG.

No comment was immediately available from Baosteel, which headed the negotiations with the miners, Companhia Vale do Rio Doce, (CVRD), Rio Tinto Ltd./Plc. and BHP Billiton Ltd./Plc.

CVRD officials were also not immediately available to comment.

Last year iron ore miners won a 71.5 percent price hike on the back of growing demand for ore to keep pace with China's expanding steel making sector.

The Chinese industry had held off on accepting the price, even as other Asian and European steelmakers fell into line.

China, the world's top importer of iron ore, had claimed the right to lead negotiations and resented that smaller mills had set the prices.

The profits of Chinese mills have been squeezed in part due to fierce competition among mills that are fighting for survival following rapid expansion.

Reuters tcs

30-05 0625



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HI guys, I am very new to the iron industry so please be patient with my questions. My questions have all come about because I heard something this morning from a Mining engineer that pricked my ears. He mentioned that iron is actually not that abundant that there is really only 3 large sources of Iron in the world, that being Brazil and two in Western Australia.

My question is, does that information sound about right and could anybody share with me the name or share code of these companies that are involved especially any penny hopefuls. Any info would be great. http://www.sharescene.com/html/emoticons/biggrin.gif

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In reply to: favshare on Tuesday 30/05/06 10:51am

AQD is currently in a j/v with RIO with full facilities and infrastructure available,


worth going over AQD's past 6 months asx announcements.


Good luck http://www.sharescene.com/html/emoticons/wink.gif

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In reply to: favshare on Tuesday 30/05/06 11:51am

the following thoughts are purely from memory, so buyer beware.


i think iron ore is abundant, but the engineer might be refering to the quality/grade.

The rio/bhp/cvrd cartel control 75% of the world"s seaborne trade.

Grade is very important , for example 63% Fe i believe is considered high grade.

But if it drops even slightly to say 55-58% Fe it is considered low grade or requires

additional processing. I also read an article recently that the pilbara region in W.A.

is the worlds single largest concentrated area for high grade iron ore. I.E. Their is probably a lot of high deposits around the world but they are smaller & spread over wide area.


The chinese recently had an iron ore discovery , i believe from memory, it was a billion

tonnes or in the billions. But it was only 40% grade, so it is uneconomic to mine.


To draw a comparsion between the gold industry, as the gold price has risen uneconomic

mines became profitable so were put back into production. The super pit in W.A.

averages 5 grams per tonne, but gold mines now might be profitable at 3 grams a tonne.


So the same thing might apply to lower grade iron ore mines, if the price keep rising

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Iron-ore market to remain tight into 2007, but oversupply risk real ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ report



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