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BHP Billiton Limited Message Board

  • elmojitogatico elmojitogatico Dec 11, 2009 9:52 AM Flag

    Febuary 10 earning and

    CHINA PLANS TO PLAY HARD BALL in early negotiations in 2010 for new and lower prices in Iron ore as excess capacities continue to grow in China. Looks like a glut of steel world wide.

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    • China eyes settlement on iron ore prices
      SINGAPORE/SYDNEY โ€“ Falling iron ore spot prices and shipments into China could signal a push by the world's biggest buyer of the steel-making raw material to position itself for an early settlement to 2010 contract talks.
      IMHO- China is bumping up against the law of diminishing returns & will have to deal with tiny bubbles.
      Delays in settling 2009 term contracts โ€“ which, formally at least, are still under discussion, but in practice are the same as the 33 per cent cut won by South Korean and Japanese steelmakers โ€“ cost chief negotiator China Iron and Steel Association a huge amount of bargaining power as demand revived and the country's growth remained strong....Shipments slow, prices fall Spot iron ore prices have fallen 6.5 per cent from three-month highs struck in late November, but forecasts are still for miners to win hefty price hikes of between 10 and 30 per cent next year as steel demand rises with economic growth."A give-back in the spot market is not surprising, but these prices still represent a 30 per cent rise on a freight-equalised basis. Chinese port stocks are declining and that may have created some softness," ANZ's senior commodities analyst Mark Pervan said...IMHO-Remember that China is government contoled not a true capitalist economy...IMHO- or course Brazil is pumping out much more than thought in the iron ore buz. The number of bookings from China's other main supplier, Brazil, also fell last month, and while the ASX data only captures a portion of the trade, it suggests a slowdown in spot purchases after a surge in September.
      The failure to resolve annual price talks in 2009 may also mean spot prices play the pivotal role in the 2010 negotiations as the starting point for discussions rather than the previous year's settlement.
      IMHO- wait till Jan. when weakness manifest itself & watch what happens to the Spot.
      Price up steel output down (a paradox)
      ...but steel output slumped over the period as the industry slowed for winter, official data showed on Friday.
      Though crude steel output declined 8.7 per cent to 47.26 million tonnes over the month, ore imports remained brisk, with mills seeking to replenish their declining inventories, traders suggested.(What's the hurry)
      Iron ore imports in October stood at 45.47 million tonnes, down almost 30 per cent from the September record of 64.55 million tonnes, with traders wary about a possible decline in steel output in the final months of the year.
      Sustainable growth
      The Chinese government has expressed concern that the high rate of iron ore imports this year has been caused by speculative activities among traders and steel enterprises, and it has threatened a CRACKDOWN.
      The sector has been producing steel with abandon in the face of a global economic downturn, with output rising 12.1 per cent to 581.177 million tonnes over the first eleven months. But the rise in imported iron ore has been even quicker, surging 38.4 per cent to 565.86 million tonnes over the same period.
      Exports from January to November reached 21.26 million tonnes, down 62.1 per cent compared to last year.
      While convinced the sector still looks strong, traders have been worried about the government's efforts to curb overcapacity through a series of new measures aimed at closing undersized and "backward" steel smelters.
      China slaps duties on U.S., Russian steel
      By Reuters, December 10, 2009 at 7:45 PM
      China, the world's biggest steel consumer, said it will impose anti-dumping duties of up to 25 percent on specialised steel imports from Russia and the United States, stepping up a trade row with Washington...
      Global Trade--How It Affects You

    • the bull in the $ could start early.

35.28-0.43(-1.20%)12:59 PMEDT