BHP and Rio Tinto dropping prices

BHP and Rio Tinto dropping prices

Australian iron ore producers have agreed to a price cut of upto 5% for the export contracts to Japan, putting themselves under further pressure due to the sharp increase in the dollar. The major producers BHP Billiton and Rio Tinto have been trying to keep the current prices bringing forth the fact that supply might be tight due to strong demand from China. When CVRD of Brazil concluded business at lower levels in the European market, the producers could no longer hope to keep their last year contract prices. New prices are at the levels of $28.28 per dry long ton with a decrease of 2.4% for fine iron ore and $36.13 per dry long ton with a decrease of 4% for premium lump iron ore. New price for BHP $ 10.80 down 20 cents and Rio Tinto $35.13 down by 43 cents. BHP ve Rio Tinto are also troubled by the 7.7% drop inthe steam coal prices. It is now hoped that due to the high demand, hard coking coal prices rise sharply.