Baosteel, China's largest iron and steel
maker, said Monday it had agreed with Australian
mining group Rio Tinto on a price increase of
up to 96.5 percent for iron ore in 2008, nearly
double that of 2007.
Baosteel,
which negotiated on behalf of China's steel
industry, agreed to a 79.88 percent price hike
for Pilbara blend fines and Yandicoogina fines
and a 96.5 percent price rise for Pilbara Blend
Lump for the contract year starting on April
1.
Prices
will be 144.66 U.S. cents for per dry metric
tonne unit of Pilbara blend fines and Yandicoogina
fines and 201.69 U.S. cents for per dry metric
tonne unit of Pilbara blend lump.
Baosteel
and Rio Tinco, the world's third largest iron
ore producer, agreed on the price hike after
talks that "maintained traditional pricing
mechanism and normal market order, and kept
the long-term friendly cooperation between the
upstream and downstream sectors", the China
steel giant said in a statement.
The
agreement represented the sincerity from the
two sides to maintain the traditional pricing
mechanism and was a result of the joint efforts
of the responsible businesses, according to
the statement.
"Chinese
steel firms will support Rio Tinto to increase
investment and output to meet market demand,"
Baosteel said.
Baosteel
agreed as early as in February on a 65 percent
price rise for iron ore imports from Brazilian
miner Vale, the world's largest.
Rio
Tinto and larger rival BHP Billiton have then
required for a "freight premium",
claiming that it costs less to ship iron ore
from Australia to China.
Chinese
steel makers have accepted huge price rises
for six consecutive years, driven up by huge
increases in demand.
China
imported 1.34 billion tons of iron ore between
2003 and 2007, 42 percent of the total world
shipments in the five years.
The
country's crude steel output more than doubled
to 490 million tons in 2007 from 220 million
tons in 2003.