Relieve pressure soaring iron ore sea freight priority Kong - steel prices, ocean freight - steel industry

China imported iron ore port stocks up to 62 millionU.S. dollars, nearly 50% increase.
tons of this important variable, to a certain extent,Australian mining company that it does not match this
pushed up the cost of another line of Chinese steelobject with the price of the contract principles,
enterprises?? International iron ore sea freight price.requirements for ocean freight demand-side
Yesterday, people close to the Shanghai Securitiescompensation, in order to smooth the Brazilian mining
News, said the relevant ministries are preparing to takeCIF mine the gap with Australia. In the current round of
the Port in the recent joint initiatives to reduce the portnegotiations, this issue is to be tough Rio Tinto
inventory and reduce the phenomenon of iron ore portunprecedented manner.
pressure to stabilize the sea freight and iron ore spotThis joint analysis of metals analyst Hu Kai said, when
market price, ease and power of China Rio, BHPthe annual Iron ore talks Lock the contract price, the
Billiton deadlock Iron ore price Negotiating pressure.impact of the CIF is the only factor in the sea freight. In
International mainstream and Brazilian steel companyrecent years the spot freight rate increase will push up
CVRD iron ore determine the starting price is almost 3long-term agreements ore CIF, and trigger follow the
months, the Australian mining company Rio Tinto andtrend of the Indian spot ore prices, which prompted
BHP Billiton refused to accept the starting price ofChina's trade companies have flocked procurement,
steel in East Asia required compensation to oceanresulting in port congestion, high freight costs, freight
freight. Earlier, as the Brazilian and Australian iron orefever has to push next year ore prices foreshadow a
mine is very close to the sea freight and no suchlong-term agreements and ultimately form a complete
"compensation farce." Before 2003, Brazil, Australiachain of the vicious cycle.
spot iron ore sea freight charter gap has beenHave suggested the market for iron ore port of the
reflected in the FOB price was much lower than thephenomenon of hoarding, government departments
current sea freight, long contract, the Braziliancan not drift. In fact, in March 2005, China enacted the
Association for ore mine in East Asia Australia,"Measures for the Administration of iron ore automatic
consistent with CIF . Such as open mine in Brazil inimport license" as soon as possible on the Hong Kong
2000 prices 15.9 U.S. dollars / ton, the Australian mininggovernment departments should deposit of iron ore to
18.5 U.S. dollars / ton, Brazil, Australia to China, shippingthe Port in the work. Meanwhile, from the iron ore
costs were 9.5 U.S. dollars and 6.5 dollars, integratedmarket order rectification at source, change in the iron
mine CIF Ge Baxi 26 USD / tonne, the Australianore traders and steel enterprises in the import channels
mining 25.4 U.S. dollars / tons, the spread between theand more, links and more confusion to stop hoarding,
two is only 0.6 U.S. dollars, increase by 2%.drive up the price. Hu Kai, also believes that like to
Dry bulk shipping market in recent years continued tobreak the deadlock of iron ore negotiations, the
rise, Brazil, China, Australia to expand the differenceChinese side need to start from the most vulnerable
between sea freight, resulting in Brazil, Australia, theaspects of starting, to take measures to reduce the
gap gradually opened ore CIF. May 2008, thecurrent sea freight.
international dry bulk shipping market, following inPreviously executive vice president of China Steel
November 2007 again hit a record high point of BrazilAssociation Luo said China is resolutely opposed to the
to China, shipping to 106 U.S. dollars / ton, 35 dollars infreight price difference on the ground of long-term iron
Western Australia to China Shipping / ton, twoore prices for fare increase by the agreement,
premium 60 U.S. dollars / ton than the same period innegotiations will take measures to cope with potential
2007 rose 72% over the same period in 2006 rosedeadlock. This proves that the Chinese shipping market
330%. Long-term contracts by 2008 65% increase,will start to suppress. Hu Kai, that these measures will
and the current spot price of a charter, the BrazilianChina be completed until after the Australian mining
ore CIF value will reach 189 U.S. dollars / tons of ore incompany to resume negotiations, 6 months ago the
Australia was 130 U.S. dollars / tons, spread over 59results difficult.