Rio, BHP to hike iron ore prices for Japan companies: report

8th June 2010, Comments 0 comments

Anglo-Australian mining groups Rio Tinto and BHP Billiton plan to raise iron ore prices by up to 23 percent in the July-September period, a Japanese media report said Tuesday.

The Nikkei business daily said that the second consecutive quarterly hike would see iron ore priced at around 147 dollars per tonne between July and September, an increase of 140 percent on the financial year ended March.

Another global giant, Brazil's Vale, is expected to follow suit, the report said.

The report said that Japanese steel companies, which have agreed to negotiate prices on a quarterly basis instead of annually from this fiscal year are likely to accept the new deal.

Leading steelmakers in Japan agreed on a 55 percent increase in the price of coking coal and a 100 percent markup of iron ore for the April-June quarter.

Prices paid by Japanese and South Korean steel giants are generally used as a reference for the rest of the world industry.

In an attempt to pass on the higher costs, Nippon Steel Corp and others have notified auto makers and other large buyers that steel prices will be raised and that the pricing period will be shortened.

Shares in Japanese steelmakers such as Nippon Steel and JFE Holdings came under selling pressure Tuesday as news of the price hike combined with concerns about the long term outlook for Asian steel demand.

Nippon Steel closed 0.98 percent lower while JFE lost 1.07 percent.

© 2010 AFP

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