Firstenergy Corp. (FE)

[johnlw]

Globe/WSJ say Inco buyer, China set iron-ore price

2006-12-22 05:47 ET - In the News

The Globe and Mail reports in its Friday edition that Inco buyer CVRD has agreed with China's Shanghai Baosteel Group on a 9.5-per-cent increase in the price of iron ore. The Wall Street Journal reports inside The Globe the move likely sets a global benchmark for 2007 price increases at the higher end of market expectations. A 9.5-per-cent increase is smaller than those of recent years. Iron ore is an important steelmaking ingredient. Baosteel is one of the largest steelmakers in China. Baosteel acted as lead negotiator for the entire Chinese Steel industry. The 9.5-per-cent increase for ore shipped from Brazil to China starting in May, 2007, lifts the price of iron ore fines to about 44.47 (U.S.) per tonne. In the third quarter of this year, CVRD sold iron ore for an average price of $40.61 (U.S.) per tonne, not including shipping costs. China expects to import about 354 million tonnes of iron ore in 2007, up 11 per cent from 2006. CVRD spokeswoman Fatima Cristina noted the agreement covers only one type of iron ore, iron-ore fines, and not iron-ore pellets, another kind that can sometimes vary in price from fines. Inco stock closed off five Canadian cents at 85.69 (Canadian) in Toronto Thursday.