Australian Minister Says Let Market Decide On Iron Ore Pricingadmin
The outcome of annual iron ore contract price negotiations between Australian suppliers and Chinese buyers must be decided by market forces, Australian Trade Minister Simon Crean said Saturday.
China wanted the status of a market economy, which Australia previously formally recognized during trade negotiations, so it must recognize that the market will determine prices, he said.
“No one likes paying higher prices,” he told reporters on the sidelines of a trade ministers conference in Bali, when asked to comment on the negotiations.
Australia won’t seek to intervene, with the outcome up to the participants, he said.
Chinese steel mills, led by Baosteel Group Corp., are in talks with BHP Billiton Ltd. and Rio Tinto PLC on long-term contract prices for the fiscal year that started April 1.
The parent of Baoshan Iron & Steel Co. has reached an agreement with Brazilian miner Companhia Vale Do Rio Doce, or Vale, on a 65% or 71% price increase in long-term contract ore supplies, depending on the ore quality, but BHP and Rio Tinto are seeking a freight premium in addition on these increases.