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

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May 2009 | Steel Raw Materials


Rio settles contract with Japan: Iron Ore Highlights


Rio Tinto has settled their 2009 iron ore benchmark with Japanese steelmakers at 33% lower than last year for fines, and 44% lower for lump.

Rio Tinto has settled their 2009 iron ore benchmark with Japanese steelmakers at 33% lower than last year for fines, and 44% lower for lump. Pilbara Blend and Yandicoogina fines were settled at 97¢/dmtu, while Pilbara Blend lump were settled at 112¢/dmtu.

However, this cannot be taken as much of a guide to the benchmark with Chinese steelmakers. China imports about three times more iron ore than Japan, so its benchmark with Australian miners is far more important than the Japanese settlement. As far as Vale is concerned, following their unsuccessful demands for an increased contract price in October, they are likely to keep a low key this year and wait for the Australians to settle first.

China would expect better deal

The Chinese have so far been demanding a drop of 40-45% on last year’s price. This does not seem unreasonable. They do not see...

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