On June 1, Australian miner Rio Tinto, the world's second largest iron ore producer, announced that Rio Tinto subsidiary Hamersley Iron has settled its iron ore contract for 2009 with South Korean steelmaker POSCO and Taiwanese steelmakers China Steel Corp (CSC) and Dragon on the same terms agreed with all its Japanese customers.
According to the agreement, the price agreed for the 2009 contract year for Pilbara Blend Fines and Yandicoogina is US cents 97 per dry metric ton unit, while the price for Pilbara Blend Lump is US cent 112 per dry metric ton unit.
Commenting on the agreement, Rio Tinto Iron Ore Chief Executive Sam Walsh said, "Each year the pricing negotiations are tough and this year is no exception, although the situation is becoming clearer as more customers settle to the same terms."
"We continue to negotiate with our remaining customers, the bulk of whom are in China. We believe the settlements achieved to date demonstrate that customers appreciate the certainty of price and volume that the benchmark system ensures," Mr. Walsh added.
On Sunday, May 31, the China Iron and Steel Association (CISA) said that China's steel companies would not accept the 33 percent cut in the iron ore price contracts.
Rio Tinto stated that approximately half of the iron ore that the company has produced in the current calendar year has been sold on a spot market basis.