Australia iron ore negotiations on April 1 the results difficult
3 22, Rio Tinto and its annual global CEO Aibo Iron ore Welsh said the company president, estimated that on April 1, and Baosteel's iron ore negotiations will be difficult to reach an agreement. Rio Tinto believes that the current iron ore prices in 2008 has reached 65% -71% price increases did not reflect the cost advantage of Australian mining and shipping cost advantage factor, therefore, companies have the patience to wait for the outcome of the negotiations with China.
Rio Tinto not to give up compensation for sea freight
This year on April 1, Rio Tinto and Baosteel's iron ore negotiations will result?
Wales, president of Rio Tinto iron ore to the press a less optimistic response, "said the negotiations, today is already March 22, and the new year is the April 1 start, I suspect on April 1 days before the agreement can be reached, but in this matter we have been optimistic. In the past we have seen, some of the negotiations until the end of June only. Therefore, in this regard, we are very patient, and hope to see the market eventually to realize that the value of this area. "
Not accepted for Rio Tinto's iron ore price agreement has been reached because, Wales told reporters, "This year we have seen, Japan's Nippon Steel and CVRD in Brazil the first agreement, the price of iron ore increased from 65 %? 71%. We do not accept this price agreement, because the magnitude of price increases, did not reflect market fundamentals, that demand is very strong and very tight market, a fundamental; also does not reflect from Australia to China's iron ore is the lowest cost, and do not reflect our freight advantage factor. "
However, Rio Tinto asked to be compensated sea freight means the collapse of the original negotiation mechanism, this idea has not been China's consent. Wales also admitted that the negotiations may be more difficult.
Bet-than-expected Chinese steel production China Digestion Increment of global iron ore 90%, the absolute use of the global iron ore production accounts for 50% of China's economic growth rate in 2008 dropped to 8% will not affect Steel Development of the industry to significantly reduce iron ore demand?
In Rio Tinto said the global CEO Aibo, in 2008, Chinese steel production may be lower than in 2007, this is because China 2008 GDP growth is expected to be lower than in 2007. But even so, the demand for steel in China is more than Rio Tinto iron ore capacity expansion. China's urbanization process needs a lot of steel. In addition, like India, Brazil, the Middle East region is growing demand for iron ore. On Rio Tinto, the most important consideration is to try to meet the demand, to meet the rapid development of the iron ore needs.
Globally, Rio Tinto's 220 million tons from the present to expand production to 320 million tons in 2013, after which will expand production to 4.2 million tons and 600 million tons of the plan. Since 2003, Rio Tinto has decided to invest in the expansion on the amount of iron ore has reached 75 billion dollars. Rio Tinto in determining when a massive expansion plan, one aspect is to see China in 2003, China for steel demand forecasts. At that time people's forecasts are based on about China's steel production up to 250 million tons, very few people to 300 million tons as the base of the forecast. The outcome is that China's steel industry as well as China's economy than their own was the most optimistic estimates are good people. In 2007, China's steel production has more than 480 million tons in 2008, is expected to reach 520 million tons or even 550 million tons.
Spot ore prices will not be turning point
Now, many international iron and steel sector forecast iron ore prices surged this year after or next will appear in the second half of the spot price and the price of a long association inversion phenomenon in China this year Steel Exports will fall sharply, which also affect the demand for iron ore.
Rio Tinto not to give up compensation for sea freight
This year on April 1, Rio Tinto and Baosteel's iron ore negotiations will result?
Wales, president of Rio Tinto iron ore to the press a less optimistic response, "said the negotiations, today is already March 22, and the new year is the April 1 start, I suspect on April 1 days before the agreement can be reached, but in this matter we have been optimistic. In the past we have seen, some of the negotiations until the end of June only. Therefore, in this regard, we are very patient, and hope to see the market eventually to realize that the value of this area. "
Not accepted for Rio Tinto's iron ore price agreement has been reached because, Wales told reporters, "This year we have seen, Japan's Nippon Steel and CVRD in Brazil the first agreement, the price of iron ore increased from 65 %? 71%. We do not accept this price agreement, because the magnitude of price increases, did not reflect market fundamentals, that demand is very strong and very tight market, a fundamental; also does not reflect from Australia to China's iron ore is the lowest cost, and do not reflect our freight advantage factor. "
However, Rio Tinto asked to be compensated sea freight means the collapse of the original negotiation mechanism, this idea has not been China's consent. Wales also admitted that the negotiations may be more difficult.
Bet-than-expected Chinese steel production China Digestion Increment of global iron ore 90%, the absolute use of the global iron ore production accounts for 50% of China's economic growth rate in 2008 dropped to 8% will not affect Steel Development of the industry to significantly reduce iron ore demand?
In Rio Tinto said the global CEO Aibo, in 2008, Chinese steel production may be lower than in 2007, this is because China 2008 GDP growth is expected to be lower than in 2007. But even so, the demand for steel in China is more than Rio Tinto iron ore capacity expansion. China's urbanization process needs a lot of steel. In addition, like India, Brazil, the Middle East region is growing demand for iron ore. On Rio Tinto, the most important consideration is to try to meet the demand, to meet the rapid development of the iron ore needs.
Globally, Rio Tinto's 220 million tons from the present to expand production to 320 million tons in 2013, after which will expand production to 4.2 million tons and 600 million tons of the plan. Since 2003, Rio Tinto has decided to invest in the expansion on the amount of iron ore has reached 75 billion dollars. Rio Tinto in determining when a massive expansion plan, one aspect is to see China in 2003, China for steel demand forecasts. At that time people's forecasts are based on about China's steel production up to 250 million tons, very few people to 300 million tons as the base of the forecast. The outcome is that China's steel industry as well as China's economy than their own was the most optimistic estimates are good people. In 2007, China's steel production has more than 480 million tons in 2008, is expected to reach 520 million tons or even 550 million tons.
Spot ore prices will not be turning point
Now, many international iron and steel sector forecast iron ore prices surged this year after or next will appear in the second half of the spot price and the price of a long association inversion phenomenon in China this year Steel Exports will fall sharply, which also affect the demand for iron ore.
About the Author:
I am an expert from China Products, usually analyzes all kind of industries situation, such as inflatable boat works , rubber coated fabric.
Author: betty