The World Steel Association (worldsteel) released a statement today expressing its renewed concern at the inevitable consequences of imposed pricing settlements and possible abuse of dominant positions by the main iron ore suppliers.
Commenting on the new short-term raw material price contracts based on spot market pricing, imposed by three mining giants, worldsteel director general Ian Christamas said, "The benchmark system may have imperfections but it has the merit of supporting long-term relationships between the steel industry and raw materials suppliers leading to beneficial medium-term investment decisions. The implied move to spot pricing will be volatile and benefit neither side in the medium to long term"
Mr. Christmas also reiterated wordsteel's opposition to the domination of three companies over the world iron ore market, which limits competition, and also to the proposed JV between Rio Tinto and BHP Billiton. As SteelOrbis previously reported, on December 8, 2009 worldsteel had released a statement expressing the same concerns.
Finally, worldsteel urged competition authorities around the world to examine the market for iron ore and the market behaviour of the three mining companies.