Vale SA in advanced negotiations to sell 19 vessels - Report

Sunday, 11 Dec 2011

Bloomberg reported that Vale SA, the iron ore producer building a fleet of the world's largest commodities ships, confirmed it's in advanced talks to sell 19 of the vessels after the plan spurred opposition from Chinese ship owners.

Mr Murilo Ferreira CEO of Vale has said that he is willing to sell the ships only if the company can lease them back under long term contracts. The talks were reported earlier by the O Globo newspaper, which cited an interview with Mr Ferreira.

Vale is spending at least USD 8.1 billion on the so called valemax vessels, including buying 19 very large ore carriers and leasing another 16 in long term contracts, as at seeks to lower freight costs from Brazil to China, its biggest market. The China Shipowners Association, whose members control about 80% of the nation’s shipping capacity, advised companies not use the vessels, according to Executive Vice Chairman Zhang Shouguo. None of the six vessels already in operation since April have called at Chinese ports.

(sourced from Bloomberg.net)

Iron ore price negotiations - Move to short term pricing continues

Monday, 28 Nov 2011

World No 2 iron ore miner Rio Tinto's customers are increasingly pushing for shorter term pricing of iron ore in what has been a volatile market, its iron ore chief said on Monday.

The company said it is on track to produce 240 million tonnes a year of iron ore for calendar 2011.

(Sourced fro Reuters)

Iron ore price negotiations - India and Japan to start price negotiations

Wednesday, 03 Aug 2011 | By BL

India will commence price negotiations with Japan for export of iron ore by National Mineral Development Corporation in the next few weeks, with the iron ore miner recently receiving the draft Cabinet approval on the estimated quantity of ore exports for the next five year period.

An Indian delegation, comprising senior officials from the ministry of commerce, ministry of steel, canalising agency MMTC and NMDC, will be participating in the price negotiations. The prices are fixed in line with the prices for Australian and Brazilian exports.

NMDC which has been indicted by the Karnataka Lokayukta for under invoicing its exports to Japan and South Korea between 2006-07 and 2009-10, has received approval to export 3.3 million tonnes of ore this fiscal, as part of the new five year contract. The last contract expired on March 31st 2011.

Iron ore price negotiations - NMDC may decide ore prices for domestic users by mid April

Monday, 28 Mar 2011

State run NMDC is likely to delay revision in iron ore prices for the April to June quarter by 15 days to mid April as long-term contracts with Japan .se steel mills have not been renewed yet.

Mr Rana Som CMD of NMDC told PTI that "This time there could be little delay as contracts with Japanese firms are yet to be renewed. Domestic prices are benchmarked to that prices. So, we will take a view on that after some time, likely by middle of April.”

However, the NMDC Chairman was hopeful that the issue will soon get government clearance and contracts with the Japanese firms will be signed at the earliest.

Mr Som said that "It is at the higher levels and I hope it to be approved soon. I am sure that the contract will be renewed as early as possible adding that the company can not move ahead without government approval.”

Earlier, the company used to revise the iron ore prices at the beginning of a particular quarter. It had raised the prices by about 5.22% in January for the last quarter of this fiscal.(sourced:PTI)

BHP offered to swap China info with U.S. - WikiLeaks

Tuesday 15 February 2011

SYDNEY (Reuters) - Anglo-Australian miner BHP Billiton (Hamburg: BHP1.HM - news) once offered to trade intelligence with Washington on China, its most important market, an Australian newspaper said on Tuesday, citing leaked U.S. cables obtained from WikiLeaks.

The Sydney Morning Herald said the cables showed BHP Billiton Chief Executive Marius Kloppers had offered the exchange of information in 2009 after telling a U.S. diplomat about the extent of Chinese surveillance of his firm.

Kloppers also complained of surveillance from other firms, the newspaper said, citing another Anglo-Australian miner, Rio Tinto (Berlin: CRA1.BE - news) , as one of them.

"Clearly frustrated, Kloppers noted that doing business in Melbourne (BHP's Australian headquarters) is like 'playing poker when everyone can see your cards'," it quoted a U.S. envoy to Australia, Michael Thurston, as saying in a cable.

"(Kloppers) complained that Chinese and industrial surveillance is abundant and went so far as to ask consul-general (Thurston) several times about his insights into Chinese intentions, offering to trade confidences," the cable said.

BHP Billiton declined to comment.

BHP Billiton and Rio Tinto each count China as their biggest markets but relations with China have sometimes been tense, especially in the iron ore market which Rio Tinto and BHP Billiton dominate along with Brazil's Vale .

Tensions peaked in 2009 when Chinese steel producers failed to clinch an annual pricing deal and a Shanghai court jailed four Rio Tinto employees, including Australian citizen Stern Hu, for stealing commercial secrets and taking bribes.

Their arrest at the height of fraught 2009 iron ore price negotiations strained ties between Australia and China, and shocked the Chinese steel industry.

BHP Billiton had already riled Chinese steel mills with its 2008 bid to take over Rio Tinto, though BHP Billiton later dropped its offer in the face of stiff global opposition among competition regulators. BHP Billiton upset the mills again in 2009 with a proposed iron ore joint venture with Rio Tinto, a deal that also floundered over anti-competition concerns.

Between those two failed attempts to forge a BHP Billiton-Rio Tinto alliance, Chinese state-owned metals conglomerate Chinalco proposed a $23.9 billion partnership with Rio Tinto, which Rio Tinto initially accepted, but later rejected.

Kloppers took personal credit for quashing that deal, according to Wikileaks, the Sydney Morning Herald reported.

"Australia does not want to become an open pit in the southern-most province of China," Kloppers said at the time, according to the report.

(Reporter Bendeich & James Regan;Editing by Ed Davies and Daniel Magnowski,sourced:reuters)

Tags: offered, swap China info, U.S.,WikiLeaks,Sydney, BHP Billiton, trade intelligence, leaked US cables, Chinese surveillance,Iron ore price negotiations, Australia

Iron ore price negotiations - views of BaoSteel group chairman Xu Lejiang

Sunday, 16 Jan 2011

Baosteel Group Chairman Mr Xu Lejiang recently in the interview said “I know you most want to talk about? Iron ore negotiations. Speaking of China Steel Industry, it is indeed a topic around not in the past.”

In Mr Xu Lejiang view the subject of iron ore, like side prism which reflects different aspects of China steel industry:
1. Iron and steel industry for many years without the rapid development of China macroeconomic stability will not get the industrial food strong support
2. Excessive rate of development of steel industry, but also to the industry repeatedly encountered a bottleneck mouth
3. Ore price negotiations face difficulties, eliminate backward production capacity difficult, industry concentration falling instead of rising, core technology and the introduction of The Road barrier.

He said "Extensive development of China steel industry, the old road has come to head, mouth bottleneck is a breakthrough. In steel production has accounted for more than half the global total today, China's steel industry from large to strong adjustment and transition will certainly be the result.”

From the iron ore difficult situation in inverted extract a competitive edge, International iron ore pricing mechanism of change is this year hits one of the highest financial events. Mr Xu Lejiang said is the world's three major Mine Monopoly enterprises with stage in short supply, resulting in such a situation.

He said “Late last century, the global iron ore supply exceeding demand, integration of the advantages of the three ore mines were relatively monopolistic market position. This century, the Chinese steel output rose rapidly from 100 million tons last year, 568 million tonnes Global steel production rose from 700 million tonnes more than 1.3 billion tonnes. Mines and steel mills as the upstream and downstream, the development pace of inconsistent supply and demand balance for the time being to break the iron ore price agreement mechanism for long-crumbling.”

He said “In this difficult situation of iron ore, on one hand of course, there are three major mines just today, not tomorrow, seeking short term interest factor, which will be the test of history is not permanent, but the other On the one hand, also reflects the low concentration of Chinese iron and steel industry, steel demand in different inconsistency issues such as trade order will not ring true.”

He added “The ore pricing mechanism changes, the Baosteel and other Chinese steel mills have brought no small impact on the future ownership of the steel to different starting line in a competition is a challenge and an opportunity make their own forced out really competitive, reflected. Similarly, the hot metal to produce different quality, different value added products. Who steel making capacity, who will be able to produce good products, you can win the market competitiveness.”

He concluded “Forced mechanism will extract a Chinese steel industry walk up the resources of security system. Baosteel as early as the beginning of this century mining downturn, the CVRD and Rio Tinto and other miners venture Cooperation Lock mine some interest, to some extent the interests of achieving a hedge. Ore prices skyrocketing in the present case, there will be new investors into the mining industry and a round of going out the formation of new iron ore supply capacity, the global ore trade pattern will return to a win win situation.”

Courtsey news by business.ezinemark.com