To the Chinese firm Vale had left the negotiating table

It is the water drop that straw. The requirements of the producers of iron ore which demand an increase in the prices of more than 90 in the second quarter sparked a puts response of Steelworkers to the Continent. EUROFER, the association that represents its strong leaders of production accumulated 200 million tonnes of steel per year, issued a communiqué in which the industry says outraged by claims providers of ore price. Steelmakers confirm that mineral groups attempt to impose increases by 80 to 90 for fines and more (cooked pellets from iron ore concentrate) pellets and lumps (ore into pieces). "These increases occur at a time when the industry is still affected by the effects of the most serious financial and economic crisis since the 1930s," said Eurofer. "This magnitude increases will have a significant impact on the prices of steel and, thereby, on the entire chain of value of manufacturing industry and the building, therefore, in the end, on the European consumer," goes the professional body. With effect, "the reduction of demand for many price-sensitive products, slowing the economic recovery and, eventually, pushing economies into recession."

A very dark scenario largely inspired by bitterness and the powerlessness of the steelmakers to suppliers of raw materials more more powerful. EUROFER said in effect that, even during the crisis the most serious of the eighty years margins operational (within the meaning of Ebit) of iron ore production went up to 50. Steelmakers are the opportunity also to denounce the extreme concentration of this crucial raw material of steel suppliers. The three tenors - in order, Vale, Rio Tinto and BHP Billiton - focus their hands over two-thirds of the world. In particular, Eurofer reiterated its firm opposition to the creation of a production joint venture in Australia between Rio Tinto and BHP Billiton iron ore (about 36 of the international offer from Worldsteel). Steel producers fear that this fusion leads by more power over the price of the trio of head of this mineral resource at the global market is estimated at more than 200 billion dollars.

Final phase of negotiation

Pending, in China, the iron ore spot prices approached last weekend 140 dollars per tonne. The gap with annual contract prices 2009-2010 therefore further widened when came in the final phase of negotiation of prices 2010-2011 that should normally be applied starting next April 1. Aware of this, the three giants of the mines are trying to impose a contractual structure for a period more short, quarterly, and a system of calculation of the price that closer them to those of the spot market. Put forward some time ago by BHP Billiton, this reform of trade suppliers-customers is obviously not to the taste of the steel industry. Last price ( 90) and due (quarterly) Brazilian Vale, number one world iron ore with a share of international trade in this product of 33 according to Worldsteel, have deeply angered Chinese customers. They "cannot even accept an increase in the price of 40-50 ", j. Yin Jimei, expert in Ttssteel. To the Chinese firm, Vale had left the negotiating table.