It is reported that Chinese steelmaker Baosteel has agreed to 23% increase in Q3 iron ore price requested by Rio Tinto and BHP Billiton, thus FOB price would be USD 147 per tonne the same with miners Japan deal.
Mr Chen Ying Secretary of Chairman of Baosteel Holdings to reporter on June 17th that "I haven''t heard that Baosteel has accepted the 23% hike."
However marketers expected a big possibility of China to nod on the asking price, "the reason is that China doesn''t want to break the long-term cooperation with miners in spite of disagreement on quarterly pricing. Chinese steel mills have to buy iron ore for production. The deal may probably pose heavy burden on Chinese mills especially those small-and-medium-scaled ones."
Once Chinese mills accept the 23% increase for July to September delivery, they will pass the high cost on end users. In other words, Chinese civilians will buy the bill and be the final victims.
(Source: www.steelhome.com.cn)