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Steelmakers Have to Raise Prices on Costs, Group Says |
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administrator |
DATE |
2010-05-13 17:27:09 |
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Steelmakers Have to Raise Prices on Costs, Group Says
Thu, 13 May 2010
Steelmakers, paying 90 percent more for iron ore, have to raise prices to pass on the higher raw material costs, the World Steel Association said.
The move by iron ore exporters this year to abandon a 40- year custom of setting annual prices in favor of quarterly contracts is a “very negative trend,” Chairman Paolo Rocca said in an interview in Beijing. The change and the higher costs “will affect our customers,” he said.
The association last month called on authorities globally to examine the iron ore market after Brazil’s Vale SA won a 90 percent price increase from Japanese mills for quarterly contracts started April 1. JFE Holdings Inc., Japan’s second- largest steelmaker, is planning to raise export prices by 20 percent to 30 percent in the July quarter from April to offset costs, an executive said.
“Steel prices aren’t rising as fast as costs,” said Peter Tzeng, a Taipei-based analyst at Polaris Securities Co. “It is a case of miners and steelmakers fighting over profits.”
Vale, BHP Billiton Ltd. and Rio Tinto Group account for about two thirds of globally traded iron ore market, worth $200 billion a year, according to an estimate by Credit Suisse Group. China last month said it was investigating the possibility that the three companies may be monopolizing supplies of the steelmaking ingredient.
Source from Bloomberg |
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