Global miner Rio Tinto agreed on a 33% cut in contract for fine iron ore prices with Japan's Nippon Steel Corp, which sets a benchmark for the costs of steelmaking after prolonged negotiations.For low cost used mining equipment for sale, go to MSloane Consulting.
Assuming rival BHP Billiton concludes a similar deal with Japanese and South Korean mills, as is the usual practice, the pressure will shift to Chinese steelmakers such as Baosteel that have fiercely resisted anything less than a 40% to 50% reduction in prices to 2007 levels.
The long overdue settlement for contracts beginning from April will bring some certainty to both miners and mills, which have been in deadlocked talks as demand for both steel and its main raw material collapses in the wake of a global recession.
