By Rudi Filapek-Vandyck<\/p>\n
Market rumours have been confirmed today, with major producer of iron ore, Rio Tinto ((RIO)) announcing a pricing agreement has been reached with one of its major customers in Japan while Chinese steel mills continue to demand much lower prices than producers seem willing to agree to.<\/p>\n
According to news wire reports, Rio Tinto and Japan’s Nippon Steel have agreed to a price fall of 33% for fines and 44% for lumps. The announcement marks the first price fall in seven years but falls short of reported Chinese demands of a price fall of at least 40% for iron ore fines this year.<\/p>\n
According to a joint statement issued in London, Nippon Steel has agreed to pay Rio US97c a dry metric ton unit, or about US$61 a ton, for its benchmark product in the year started April 1. The new price compares with last year’s record of US144.66c for Rio Tinto’s Pilbara Blend fines.<\/p>\n
In addition, Nippon has agreed to pay US112c per dry metric ton unit for Rio Tinto’s premium Pilbara Lump product, marking a retreat of 44% on last year’s agreed price settlement.<\/p>\n
With market expectations ranging between price falls of 15-50% the announcement is likely to be welcomed as a “less bad than what could have been” event. The main question remains, however, whether the Chinese steel mills, by far the largest buyers of iron ore, will accept the settlement as a benchmark for the industry as a whole, or not.<\/p>\n","protected":false},"excerpt":{"rendered":"
Rio Tinto and Nippon Steel have agreed to lower iron ore price by 33-44% this year, but how will the Chinese respond to this?<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[89,88],"acf":[],"_links":{"self":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/55471"}],"collection":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/comments?post=55471"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/55471\/revisions"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=55471"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=55471"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=55471"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}