Chinese steel makers, seeking to hold down iron ore prices in
talks with suppliers, should work with overseas mining companies to
curb freight rates that have risen to records, the China Iron and
Steel Association said yesterday.
"The surge in freight rates is unreasonable," said Luo
Bingsheng, vice chairman of China Iron and Steel Association, at an
iron ore conference in Dalian, northeast China. "Steel makers and
miners should study together and take measures to stop the
overpriced shipping costs from hurting global iron ore trade
further."
Iron ore demand from China, which produces a third of the
world's steel, has sent prices up threefold in the past five years.
Freight rates have surged ninefold, bolstered by crude oil prices
that have soared to exceed US$93 a barrel, from US$33 at the end of
2002, said Bloomberg News.
Steel makers, including Shanghai-based Baosteel Group Corp, are
set to negotiate next month with suppliers, including Cia Vale do
Rio Doce, the world's biggest producer of the raw material, to
agree on benchmark iron ore contracts for delivery starting in
April.
Crude steel production in China may rise by a-10th to 530
million tons in 2008 from 480 million tons this year, Luo said.
Major importers should negotiate prices on behalf of nearby smaller
traders, he said.
The cost of bringing a ton of ore from Tubarao in Brazil to east
China's ports of Beilun or Baoshan has more than doubled this year
to US$87.188, according to the Baltic Exchange. That's higher than
the US$73.20 that Chinese steel makers agreed to pay for each ton
of iron in the ore from Brazil.
(Shanghai Daily October 31, 2007)
