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Wednesday, June 25, 2008
Business

International Business News

China agrees to nearly double ore price

China's Baosteel said Tuesday it would nearly double the price it pays mining group Rio Tinto for iron ore, in a deal experts said underscored the Asian giant's lynchpin role in the commodity boom.

Baosteel, China's largest steel maker acting on behalf of the nation's industry as a whole, negotiated to pay between 80 and 97 percent more than last year depending on the category of iron ore, which is used to make steel.

"China is a major iron ore importer. So China's iron ore imports will certainly impact the world's iron ore prices," said Lim Shuaik, a Beijing-based analyst with Fitch Ratings.

The new prices will affect all iron ore deliveries for the 2008 contract year that began on April 1, Anglo-Australian giant Rio Tinto said in a statement.

Baosteel called the deal mutually beneficial and said it would help the long-term development of the steel industry on both the mining and milling sides.

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