Reuters cited some analysts saying that despite tough talks by the world's big iron ore miners, this will not win them the 100% annual price the spot market suggests, but an agreement, if reached, should outstrip the 40% expected earlier.
Mr James Wilson, a mining analyst for DJ Carmichael said: “There's no reason why the mining companies should feel a need to accept anything less. The alternative is for the mills to buy on the spot market, which is way up on this year's benchmark.”
Vale, Rio Tinto and BHP Billiton are locked in talks with Asian steel mills to set the next annual benchmark price even as ore is increasingly being diverted into spot contracts. They will push steel mills to either accept one of the highest annual price hikes on record or take their chances in a spot market that has more than doubled in the past 12 months.
BHP Billiton offered its clearest indication yet it was looking for a substantial increase in iron ore contract prices when chief executive Marius Kloppers repeatedly highlighted the near 100% gap between last year's benchmark and current forward prices.
[Steel Guru]
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