Chinese steelmakers now milder on iron ore price hike

SteelOrbis Shanghai The fourth round of iron ore price negotiations between Chinese Baosteel and international iron ore suppliers will be held next Monday. Despite the continuous pressures from the Ministry of Commerce and the National Development and Reform Commission, Chinese steelmakers' have softened their attitudes as the European steelmakers accepted the iron ore price increase. However in January 2006, domestic finished steel prices in China were at such a low level that Chinese steelmakers would not accept any increase in iron ore prices. As the domestic demand strengthened after the Chinese New Year holiday and finished steel exports revived significantly, Chinese steel mills started to express that they would not accept any price increase higher than 10 percent. But recently, mills from both China and other countries have started signing contracts with iron ore suppliers one after the other. Especially those in Europe and America agree on a 12 to 15 percent price increase. In the fourth round Chinese steel mills are predicted to accept an increase up to 20 percent.