Australian iron ore producers are considering charging Chinese steelmakers a shipping premium to cover freight expenses, in addition to the huge increase in iron ore prices expected from the annual iron ore talks for which preparations have already begun.
Australian officials believe that it is in China's interest to pay the same after-delivery price for Australian and Brazilian iron ore. Therefore, the premium proposal is seen by many as a step toward the equalization of the prices that China pays for Brazilian delivered iron ore and for Australian origin ore.
However, many market players doubt that Chinese steelmakers will accept the new delivery terms proposed by the Australian iron ore producers.
According to the market expectations, the shipping premium will total a maximum of 30 percent on top of the ordinary price rise.