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http://www.theaustralian.news.com.au...21-643,00.html
Fortescue Metals Group has delivered another blow to the ailing benchmark iron ore pricing system, offering to sell the commodity at the lowest price negotiated this year in return for $US6 billion ($7.3bn) of cheap funding from China.
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It also gives the strident China Iron & Steel Association a chance to save some face after it refused to agree to Rio's offer of a 33 per cent drop in contract prices, only to see iron ore spot prices surge higher as steel demand picked up.
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CISA had previously been chasing a discount of 40 per cent or more.
Yesterday, CISA said it would use the Fortescue price in talks with the world's big three iron ore miners, Vale, Rio and BHP Billiton, in an attempt to get one price for all the iron ore it buys.
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Rio was quick to issue a statement saying it would not be letting Fortescue set its price.
"We do not see this pricing agreement as relevant to our pricing for fiscal 2009," a spokesman said. "Rio Tinto conducts its own negotiations with its customers worldwide. Whether and how other producers reach their own agreements is up to them."
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It also gives the strident China Iron & Steel Association a chance to save some face after it refused to agree to Rio's offer of a 33 per cent drop in contract prices, only to see iron ore spot prices surge higher as steel demand picked up.
......
CISA had previously been chasing a discount of 40 per cent or more.
Yesterday, CISA said it would use the Fortescue price in talks with the world's big three iron ore miners, Vale, Rio and BHP Billiton, in an attempt to get one price for all the iron ore it buys.
.......
Rio was quick to issue a statement saying it would not be letting Fortescue set its price.
"We do not see this pricing agreement as relevant to our pricing for fiscal 2009," a spokesman said. "Rio Tinto conducts its own negotiations with its customers worldwide. Whether and how other producers reach their own agreements is up to them."