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Forecasts and market analysis based on price assessments from Fastmarkets MB and Fastmarkets AMM

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April 2009 | Steel Raw Materials


Negotiations remain delayed: Iron ore Highlights


MBR still holds that the eventual settlement prices for FY2009 will come through with 30-40% declines in prices.

The intermediate iron ore price heard a few weeks ago, now seems to be another case of rhetoric to sway the FY2009 iron ore contract talks. Two weeks ago, the Chinese Iron and Steel Association (Cisa) announced that an interim agreement for iron ore prices between miners, Rio Tinto and BHP Billiton, and Chinese steel mills was put in place for a 40% cut in benchmark prices until the market stabilised and a true benchmark price settled on. Only Cisa confirmed the agreement, however. Since that time, we have heard conflicting reports from miners and mills and understand that no binding agreement has been reached.

Indeed, each miner is supplying iron ore by various means and discounts. Since the fourth quarter of 2008, BHP Billiton has been supplying ore through the spot market, where prices are holding at about 40% below FY2008 benchmark prices. Vale is understood to be selling...

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