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Aggressive iron ore price increases worry cape owners

Aggressive iron ore price increases worry cape owners

Beijing: The big three iron ore miners - Vale, Rio Tinto and BHP Billiton - are seeking a 50 percent hike in prices, China Daily reported on Thursday, citing unnamed industry sources.
"Baosteel, which is leading this year's ore talks, would wait and see how Japanese and South Korean steel mills react to the proposal before taking a decision in this regard as they do not want to be blamed subsequently for the steep rates," the head of the iron ore department of a large Chinese still mill told the paper.
The news is potentially very serious for dry bulk owners who are relying on China to carry on importing vast volumes of overseas iron ore this year to soak up the giant orderbook set to deliver this year, which sees up to 300 capesizes newbuilds pencilled to join the world fleet in 2010. 'Our big concern,' one sizeable Japanese capesize operator told SAO, 'is if the big three miners try to hike prices too much. If they do, Beijing might return to its domestic mines.'
This year's iron ore price talks are set to be resolved by the end of March though, like in previous years, are likely to drag on into April and May.
Chinese mills are aware of prices likely heading northwards for iron ore and are set to import their highest monthly total of the commodity this year in March. Insiders say after a sluggish start to the year import-wise Chinese mills will take in as much as 60m tonnes of iron ore this month. [04/03/10]


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