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Tuesday, May 12, 2009

Steel prices again on the "insidious trick technique" make things difficult for the Chinese ore negotiations

By Professional editor working for Nuts & Kernels.

A chief director by the Japanese hard metal costs of steel ore dialogues, "conspiracy" or will be played over, this will in addition highly severe impairment the welfare of the Chinese steel and hard metal enterprises.

Japanese iron alloy charges conspiracy

April 16, Japanese newspapers described that Nippon Steel and other foremost iron alloy manufacturers are employed with BHP Billiton and other assets considering the 2009-2010 fiscal year metal ore agreement cost discussions on associated affairs, is expected to down turn on the agreement cost of metal ore 30 % of the agreement.

In this consider, are in circulation in the Productivity Promotion Center, said iron alloy analyst Joseph Rongliang, "or the reality of such a likelihood, but somewhat small. If there is, will have to make persons suppose is a conspiracy." If the Japanese iron alloy charges come to 30% metal ore cost affirmation, then the cost than the location cost should be much higher.

Japan's hard metal costs are truly very, very bewildered by this move.

April 13, South Korea POSCO said that the swamping wish that metal ore charges this year fallen 50% after the China Steel Association has inquired to discuss metal ore charges down to the groundwork 2007 grade, which means that excavation charges are not less than 40%.

"Chinese steel enterprises should strongly resist." Rongliang He said that in the current financial crisis, the Japanese steel market prices should not regardless of capacity, to accept a little less, but because a large number of equity prices in Japan steel mines, and so kill two birds with one approach can be described as -- On the one hand, South Korea and other countries significantly increase the cost of steel prices, thus increasing the Japanese enterprises in the international steel markets, further expansion in the global market share; On the other hand, prices of steel to Japan, Australia and other overseas mining shares, up from part of price of access to rights and interests, and then offset the range of costs.

"Steel costs in Japan the rehearse of enterprise ethics is wholly missing." Rongliang Joseph said.

Last year, steel prices in Japan is the first and Vale do Rio Doce in iron ore prices 71 percent to reach an agreement, the result of China's steel enterprises to pay the more than 1400 billion yuan, almost the whole country the sum of the profits of steel prices.

China should firmly say no

"Last year, the bargaining scheme has been decimated, it can be said to stay peeled meat. To do so this year, the discussions and will be decimated one time afresh, there is no cornerstone for the negotiations." Rongliang He said that the Chinese iron alloy enterprises is no longer essential compliance with the preceding custom, the discussions should go in their own times.

At present, Japan's steel production is about the year 100 million tons, while China occupies the world's 1 / 3 of the iron and steel production, 400 million tons per year of iron ore imports, much of Japan's iron ore consumed in large quantities. But the international negotiations on iron ore prices almost always hold the right to speak in the hands of the Japanese steel prices, China's steel prices in a weak position, and not the quality of imported ore and the Japan-South Korea business.

It is understood that the present Nippon Steel, Mitsui and other enterprises, such as extensive overseas Australian mining shares, the Australian iron ore in the 24 major Japanese companies have focused on eight investment, equity participation of 16, has been in the progressive control of the upstream steel industry industry .

So, how can China's hard metal enterprises effectually conflict back to the primary voice of their own?

Rongliang He said, first of all, it is needed to whole the integration of steel ore deal market, financial gatherings need to consider the ethics of large businesses, in rank to set a good instance of tiny hard metal mills, to fulfil with the provisions of China's steel ore imports; Secondly, the connection can the forces of the connection should be International Iron and Steel and South Korea, and other interactive businesses; Finally, it is needed to formulate corresponding approaches to better consider the belief of scope for prices. As long as a firm stand with the Chinese steel ore use is enough to configuration a conclusive impact. At the matching time, in good trust to cure the steel ore enterprise, principally long-term enterprise partnership. - 18780

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