LONDON (Business Wire) -- Rio Tinto Iron Ore subsidiary Hamersley Iron has today reached agreement with China's Baosteel on the price for Hamersley iron ore deliveries for the contract year commencing 1 April 2008.
Under this agreement, the new prices for Hamersley will be:
Pilbara Blend Fines/ Yandicoogina Fines
US cents 144.66 per dry metric tonne unit
Pilbara Blend Lump
US cents 201.69 per dry metric tonne unit
Sam Walsh, chief executive of Rio Tinto's Iron Ore Group, said: "Rio Tinto is pleased to reach this agreement today with Baosteel, China's leading steelmaker."
"The agreement reflects the continuing very strong demand in the market for Hamersley's products", he said.
Mr Walsh said, "The agreement builds on the valuation premium for Rio Tinto's Pilbara iron ore businesses, the importance of which is highlighted as we move towards our 320 and 420 million tonne per annum goals from our expected capacity of about 200 million tonnes in 2008."
The new prices will be the benchmark for all Hamersley long term contract sales for 2008-09 and includes its Pilbara Blend product, which was launched in July 2007 and which has been strongly endorsed by the market.
US cents per dry metric tonne unit---------------------------------------------------------------------- 2007 2008----------------------------------------------------------------------Pilbara Blend Fines/Yandicoogina Fines 80.42 144.66----------------------------------------------------------------------Pilbara Blend Lump 102.64 201.69----------------------------------------------------------------------
My note: increases are 80% and 96.5%. The Chinese have finally accepted part of the freight differential as a part of the long term contract prices from Australia--and possibly other parts of the world closer to them in future contracts.
Link:
https://www.globeinvestor.com/servlet/story/BWIRE.20080623.20080623005928/GIStory/