European auto industry concerned over iron ore price hikes

The European Automobile Manufacturers' Association (ACEA) released a statement recently, expressing its concerns regarding "the sudden and massive increase in the price of iron ore, a crucial material for producing steel." The association said that iron ore price hikes, up to 80 percent, would affect the competitiveness of manufacturing in Europe, including the automotive industry.
 
"The automobile industry needs broad access to raw materials at competitive conditions, especially in times of fragile economic circumstances. With roughly one ton of steel per car, the automotive sector is a major client of the steel industry and - hence, iron ore exports. Cost pressure in the sector is already high due to large investments in environmental and safety technologies, while economic recovery and consumer demand are still slow," reads the statement
 
After underlining the high pricing and market strength of the world's three largest iron ore exporters, namely Vale, BHP Billiton and Rio Tinto, ACEA asked the European Commission and European Union member states to urgently use all appropriate channels to tackle distortive developments. ACEA stated that it also encourages the EU to rapidly develop and implement a raw materials strategy to ensure a level playing field on the world's raw material markets and facilitate broad access to raw materials from third countries at competitive conditions.