CVRD's price hike accepted by Italian and Japanese mills, too

Following the agreement with German ThyssenKrupp, CVRD announced new iron ore and pellet price agreements with Italian Ilva S.P.A and Japanese steel mills -without giving a company name. According to the agreement, the price of Carajas and Southern System fine iron ore will increase by 19 percent while the price of blast furnace pellets from Tubarao and Sao Luis will decrease by 3 percent for all parties. However, Japanese steelmakers, namely Nippon Steel, Kobe Steel, JFE Steel and Sumitomo Metal refused to comment on CVRD's announcement. On the Chinese front, Baosteel is still trying to refuse the 19 percent increase, claiming that Chinese steelmakers would not afford to cover their costs with such an increase. Many analysts believe that such a price increase would speed up consolidation in Chinese steel industry.