Although the price of iron ore have not yet reached an agreement, but the latest news, fiscal year 2010, BHP Billiton will not be made in accordance with the index price performance, the execution time in the base price on the Chinese side has agreed a global iron ore producers, according to the "China fiscal year "(ie January 1 to December 31) the implementation of the benchmark price of iron ore this year. From the current situation, China's iron ore price rise this year, the voice is still not enough, the price of coking coal is also a sharp upward trend.

Yesterday, JP Morgan Chase, Managing Director of Li Jing's latest research report that China's steel costs will rise more than 300 U.S. dollars per ton. In this context, the steel prices again in this year's margins were compressed.

Negotiations are still optimistic about the

Some analysts believe that, even if some of the Chinese side can achieve a favorable result, China's iron ore negotiations are still in a very passive position. On the one hand, according to "China's fiscal year" pricing only in the valuation period of time is different, for the price hard to have a major impact, nor is the core issue of the talks; the other hand, unless it is extremely dominant in the objective conditions of background, otherwise the party will not be many concessions on one side continuously profitable situation. This means that if the benchmark price of the execution time as the "Chinese fiscal year" as the other's concessions, then followed by the Chinese side is likely to require this to pay "price."

At present, for BHP Billiton's "index price" was not accepted, the negotiations can not be regarded as a victory. In fact, in accordance with its proposal of "trading volume set, the transaction price volatility in accordance with market conditions," saying, unless the iron ore price fell below production costs, or else the Chinese steel prices could not only benefit from taking risks, at this stage, the supplier of the bias is very obvious. So unfair proposal this would be difficult to reach an agreement.

In regard to fiscal year 2010, the final price of iron ore a long association price increases, and now can not see the message for optimism. Recently there have been foreign reports, this year may rise 60% to 70%. National People's Congress, Zhang Xiaogang, general manager of Anshan Iron and Steel Group, said, "This year the situation of iron ore negotiations are not optimistic, it might have unexpected results." He believes that 20% of the rise is certainly "playing not live" in.

Sources also said that the current three major mining companies overseas, the request is a price increase by 50%. Deng Qi-lin, chairman of Wuhan Iron and Steel Group, said that if the iron ore rose more than 50%, will exceed the cost of China's steel industry, "can not afford and can not accept."

Double cost pressures

Insiders said that Baosteel would not stand before the steel in Japan and South Korea to accept a 50% rise, or they will provoke domestic "condemning a", as the current steel prices generally low profitability, and then to receive such a high rise will undoubtedly be even greater pressure. However, the person also acknowledged that if Japan and South Korea to receive, then the domestic steel prices have also had to accept the rise. "Because mine can not supply, but the steel can not be cut."

JP Morgan Chase, who is also Managing Director and Chairman of China Securities and commodities of the Jing that, except for the benchmark iron ore prices, the China's steel enterprises will be confronted with sharply rising prices of imported coking coal.

She said that the 2010 contract price of coking coal negotiations currently underway, BHP with Japan JFEHoldings of the consultation process, the success will increase coking coal contract prices for three months, 55%, this is the first quarterly basis to the contract price. Australia's wet weather caused by the rail transportation interruption factors, spot prices for coking coal benchmark price in 2009 from 129 U.S. dollars per ton up to 220 U.S. dollars per ton.