[A] Iron Ore Price        
Note these are not really spot prices, but rather are an attempt 
to quantify the price agreements made in the spring/early summer 
between iron ore producers and steel manufacturers. 
The prices given below are prices arranged at the beginning
of May of the given year.
(1) FINES :    the most heavily-traded category of iron ore.
(2) LUMP ORE : Lumb ore consists of golfball sized pieces, 
and has higher iron content than fines.
(3) PELLETS :  Iron ore in "pellets" are semi-refined iron ore; 
blast furnace pellets.

Iron Ore Prices
Notes:  Brazil to Europe
Units:  US Dollars per ton (dry metric ton).

                    (1)        (2)         (3)

                   fines    lump ore     pellets
 contract 
     year  _____________________________________________________________
     1976 |        22.70                   43.80 dollars per metric ton
     1977 |        23.00                   42.80
     1978 |        21.50                   36.40
     1979 |        23.30                   39.90
     1980 |        28.10                   47.00
     1981 |        28.10                   43.00
     1982 |        32.50                   47.50
     1983 |        29.00                   39.00
     1984 |        26.10                   36.00
     1985 |        26.50                   36.00
     1986 |        26.20                   36.60
     1987 |        24.50                   36.70
     1988 |        23.50                   40.30
     1989 |        26.50                   47.30
     1990 |        30.80                   51.60
     1991 |        33.20                   52.10
     1992 |        31.60                   48.40
     1993 |        28.10       33.00       43.60
     1994 |        24.40       30.40       43.60
     1995 |        26.90       33.30       49.10
     1996 |        28.50       35.20       52.40
     1997 |        28.80       35.20       52.10
     1998 |        29.60       36.20       53.50
     1999 |        26.90       32.20       46.40
     2000 |        27.60       33.90       49.20
     2001 |        28.90       35.10       50.10
     2002 |        28.60       34.30       47.30
     2003 |        31.40       37.30       52.00
     2004 |        37.30       44.40       61.80
     2005 |        64.00       79.00      115.50
     2006 |        76.20       94.00      112.00
     2007 |        83.40*                          
' Based upon news of 2006 Dec 22 deal between Baosteel and CVRD for one year starting April 1, 2007.
Sources : CVRD, Wall Street Journal, US Steel and other steel producers.



 [B] Iron Ore Producers

Three suppliers account for 75 per cent of ocean trade in iron ore (2006):
1 Companhia Vale do Rio Doce (CVRD)(Brazil). Largest iron ore producer in the world.
2 Rio Tinto (Anglo-Australian)
3 BHP Billiton


 [C] Steel Makers   Buyers of iron ore.

Steel production tonnages.
Tonnages are 2006 May estimates and are in metric tons (or tonnes), 1000 kg, or 2204.62 pounds.

- Mittal Steel: India 60 million tons steel per year, six percent of total market.  Largely owned by Lakshmi Mittal.
- Arcelor  Luxembourg  53 million tons steel produced per year.
2006-01-13 Lakshmi Mittal suggests merger of Mittal and Arcelor
to Arcelor CEO Guy Dolle, over dinner.
Dolle rejects offer.
2006-05    Mittal makes formal hostile offer, valued at $23.8 billion.
2006-05-19 Mittal raises offer to $33 billion dollars.
2006-05-19 Arcelor shareholders' annual meeting.
2006-05-26 SeverStal (larvely owned by Alexei Mordashov) makes "white knight" offer
to buy 32 percent stake in Arcelor to spare Arceor from sale to Mitttal.
2006-05-29 SeverStal increase target stake in Arcelor from 32 percent to 45 percent.
2006       Evraz (controlled by Roman Abramovich) offers deal.
2006-06-25 Arcelor board of directors unanimously agrees to sale of Arcelor to Mittal for $33.8 billion.
- ThyssenKrupp:Germany. 17 million tons steel produced per year.  A major customer of CVRD iron ore.
    - Nippon Steel:      Japan       33 million tons steel produced per year.
    - JFE Steel          Japan       30 million tons steel produced per year.
    - Posco              Korea       31 million tons steel produced per year.
    - Shanghai Baosteel: China       23 million tons steel produced per year.  A major customer of CVRD iron ore.
    - TangShan           China       10 million tons steel produced per year.  
     Hebei Province.  Sales of 30 billion yuan in 2005.
    - US Steel:          USA         20 million tons steel produced per year. 
    - Nucor              USA         18 million tons steel produced per year.
    - Corus:             UK          14 million tons steel produced per year.
    - SeverStal          Russia      17 million tons steel produced per year.  Owner:  Alexei Mordashov.
    - Evraz:             Russia      14 million tons steel produced per year.
                                     Alexandr Abramov 59 per cent stake of Evraz.
                                     Alexandr Frolov  28 per cent stake of Evraz.
  2006-06-20  Roman Abramovich, through Millhouse Capital, buys 41 percent of Evraz.
    - Dafasco:           Canada      Ontario.
    - Riva               Italy       17 million tons steel produced per year.



 [D] Miscellaneous Price Change Observations

    1. Fines:     Grain-like ore.
                  Fines account for sixty percent of global iron ore trade.
                  2005 price :  $61.72 per ton
                  2006  19.0% Seller: CVRD.     Buyers: ThyssenKrupp, (May 16, 2006)
                            Seller: CVRD.   Buyers: Baosteel(May 30, 2006)
                            Seller: Rio Tinto Buyers: Nippon, Posco (May 19, 2006)
                  2005  71.5% Seller: Companhia Vale do Rio Doce (CVRD) Rio Tinto.  Buyer: Nippon Steel and Posco
                  2004  18.6%
                  2003  10.0%
    2. Lump ore:  Golfball sized pieces, has higher iron content than fines and costs more.
                  2005 price : $78.77 per dry metric ton
    3. Pellets:   Iron Ore Pellets, semi-refined iron ore (blast furnace pellets).
                  2006  -3.0% Seller: CVRD.   Buyers: ThyssenKrupp, (May 16, 2006)

      2006 May 16 ThyssenKrupp agrees to price hike for the 2006 contract year.
      2006 Jun 20 China steel makers, through Shanghai Baosteel Group, agreed to 19% iron ore price rise from BHP Billiton.
        http://www.chinadaily.com.cn/china/2006-06/21/content_622052.htm


      2006 Dec 22 CVRD of Brazil announced 9.5 % price hike from Shanghai Baosteel Group Corp, China's biggest buyer of iron ore.

Gmail - Iron ore prices went up in 2005(19%), 2006(72%) and 2007(9.5%)

Abstract (Document Summary)

The deals mirror one reached last week between CVRD and China's Shanghai Baosteel Group Corp., an agreement closely watched to see whether it determined 2007's iron-ore price increase for other steelmakers. China, stymied in its effort to set prices for iron ore a year ago, worked this year to take the lead in negotiations. In 4 p.m. composite trading on the New York Stock Exchange yesterday, CVRD's American depositary receipts were trading up 3% to $30.34. In Brazil, CVRD's common shares ended up 2.4% to 64.30 Brazilian reais ($30.01) and its preferred shares ended up 1.8% to 54.63 reais. The ADR's of Posco rose to $84 on the NYSE. Posco will buy 400,000 metric tons, or 440,000 short tons, of coal in 2007 from the Newpac mine from April 1, Resource Pacific said. The volume will increase to 500,000 metric tons annually for the following four years, the Australian company added. The coal price will be agreed upon annually, it said.

Full Text (506 words)

(c) 2006 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission. Agreements between Brazilian mining giant Companhia Vale do Rio Doce and a clutch of Asian steelmakers bolster China's role in influencing prices for some of the world's most-important raw materials. CVRD, as the company is known, reached a deal with South Korean steelmaker Posco to boost prices for iron ore, commonly used to make steel, by 9.5% next year. It also has reached agreements with five Japanese clients, Nippon Steel Corp., JFE Steel Corp., Sumitomo Metal Industries Ltd., Kobe Steel Ltd. and Nisshin Steel Co. The deals mirror one reached last week between CVRD and China's Shanghai Baosteel Group Corp., an agreement closely watched to see whether it determined 2007's iron-ore price increase for other steelmakers. China, stymied in its effort to set prices for iron ore a year ago, worked this year to take the lead in negotiations. Late last week, London-based Rio Tinto PLC reached a similar agreement with Baosteel. Rio Tinto, CVRD and Australia's BHP Billiton Ltd. control 70% of the seaborne iron-ore market. Higher iron-ore prices can put pressure on steelmakers' financial results and affect prices for everything from cars to steel beams used in construction. The 9.5% increase taking hold next year is the smallest in recent years, but many steelmakers argued demand had reached a plateau and prices should be flat. Steelmakers have been moving to restrain their raw-materials costs to continue a three-year period of healthy profits, due in part to surging steel demand from China. Separately, Posco said yesterday it is buying a 10% stake in an Australian mine for 30 million Australian dollars (US$23.4 million) to secure coal for making steel. China's demand has made it a trendsetter in determining prices for world commodities. Surging Chinese demand has helped push up prices for oil to uranium to some agricultural products. The 9.5% increase came in at the top end of market expectations. Most analysts had forecast an increase of 5% to 10% in 2007 price talks. Iron-ore prices climbed 19% in 2006 and 72% in 2005. In 4 p.m. composite trading on the New York Stock Exchange yesterday, CVRD's American depositary receipts were trading up 3% to $30.34. In Brazil, CVRD's common shares ended up 2.4% to 64.30 Brazilian reais ($30.01) and its preferred shares ended up 1.8% to 54.63 reais. The ADR's of Posco rose to $84 on the NYSE. Meanwhile, Posco will pay Australian coal miner Resource Pacific Holdings Ltd. a 10% stake in the joint-venture company that will run Resource Pacific's Newpac mine in New South Wales. "We import 100% of iron ore and metallurgical coal needed for steelmaking and this deal would ensure a stable procurement of raw materials," Posco said in a statement. Posco will buy 400,000 metric tons, or 440,000 short tons, of coal in 2007 from the Newpac mine from April 1, Resource Pacific said. The volume will increase to 500,000 metric tons annually for the following four years, the Australian company added. The coal price will be agreed upon annually, it said.

Gmail - Iron Ore prices went up again 9.5% 4 th time this year..

Abstract (Document Summary)

Contract prices for seaborne iron ore in 2007 have risen 9.5% more recently, the fourth annual increase. Iron-ore prices are at record highs, and steel mills in China are offering to pay for as much iron ore as India will sell. India's iron-ore exports rose to about 100 million metric tons last year from 41.6 million metric tons in 2002. India is the third-largest iron-ore exporter, after Australia and Brazil, and the fourth-largest producer, behind China, Brazil and Australia, according to Hatch Consulting in Pittsburgh. R.K. Sharma, secretary-general of the Federation of Indian Mineral Industries trade group, said he would like to see more iron ore from India shipped abroad for profit while global iron-ore prices are high, rather than held captive for steel making. He said more exploration and mining of iron ore in India could discover greater reserves, making India a larger power in the iron-ore industry. "The more intense discovery you do, the more extensive resources you come across," he says. Steel companies disagree. "The highest quality iron ore should be reserved here rather than exporting it," says Vikram Amin, marketing director at Essar Steel Ltd. of Mumbai. He says India may have enough iron ore for only the next 55 years and argues that keeping more iron ore inside the country for use in domestic steel plants means companies such as Essar will add more value to the iron ore. Such companies would make slabs or steel for sale at 10 to 15 times the price of a ton of iron ore and create more jobs and downstream industries in India's economy, he says.

Full Text (971 words)

(c) 2007 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission. MUMBAI, India -- In a developing world hungry for commodities, a brawl is raging in India over what to do with the nation's precious iron-ore reserves. Steel-hungry markets such as China and Europe are willing to pay more for access to that primary steel-making ingredient. Iron-ore miners and prospectors want rights to explore, mine and export more iron ore from India to the highest bidder. Foreign steel firms building plants in India, such as South Korea's Posco and Europe's Mittal Steel Co., want rights to mine iron ore in India near plants they are building. Domestic steel companies in India want their own captive reserves of iron ore, arguing that steel making within the country is the best way to add value to India's natural resources and that they should have dibs on them because they are home-country producers. Contract prices for seaborne iron ore in 2007 have risen 9.5% more recently, the fourth annual increase. Iron-ore prices are at record highs, and steel mills in China are offering to pay for as much iron ore as India will sell. India's iron-ore exports rose to about 100 million metric tons last year from 41.6 million metric tons in 2002. India is the third-largest iron-ore exporter, after Australia and Brazil, and the fourth-largest producer, behind China, Brazil and Australia, according to Hatch Consulting in Pittsburgh. R.K. Sharma, secretary-general of the Federation of Indian Mineral Industries trade group, said he would like to see more iron ore from India shipped abroad for profit while global iron-ore prices are high, rather than held captive for steel making. He said more exploration and mining of iron ore in India could discover greater reserves, making India a larger power in the iron-ore industry. "The more intense discovery you do, the more extensive resources you come across," he says. Steel companies disagree. "The highest quality iron ore should be reserved here rather than exporting it," says Vikram Amin, marketing director at Essar Steel Ltd. of Mumbai. He says India may have enough iron ore for only the next 55 years and argues that keeping more iron ore inside the country for use in domestic steel plants means companies such as Essar will add more value to the iron ore. Such companies would make slabs or steel for sale at 10 to 15 times the price of a ton of iron ore and create more jobs and downstream industries in India's economy, he says. The government of India had proposed capping iron-ore exports at 100 million metric tons by 2020, but iron-ore miners are predicting they will export 110 million to 120 million metric tons of steel this year. That frustrates and concerns steel companies. They argue it is more economical to make steel in India rather than in China because India has both high-quality, plentiful raw materials and low-cost labor while China has low-cost labor but is short on raw materials. "Today, many of our companies are producing cheaper than in China," says R.S. Pandey, secretary to the government of India's Ministry of Steel, pointing out that Indian steel companies might be a more logical place to produce and export steel rather than in China. "Everyone wants to expand their capacity in India for which they need iron ore resources." A committee of government officials and various industry interests called the Hoda Committee, named after the panel's leader, met about two dozen times in 2005 and 2006 to hash out policy recommendations for iron-ore mining. The panel has suggested increasing exports of lower-grade iron ore as the product is a major item in the country's export portfolio. The panel has also recommended earmarking some iron- ore reserves for steel companies building plants in the region, guaranteeing low-cost iron ore as a reward for industrial development. Now, government bodies in India are examining the Hoda Committee recommendations and are considering possible changes to the nation's mining and mineral-development laws that date back to 1957. Upstart Indian steel companies such as Essar Steel, a division of Essar Group, and Ispat Industries Ltd. are eagerly waiting to get rights to mining leases. "We're doing all right," said Vinod Garg, marketing director for Ispat Industries. "But if we had iron-ore mines, we'd be doing better." Already, the government of the state of Orissa in India has approved an application by Posco for a license to prospect for steel in the region, where it plans to build a $12 billion steel plant, to be constructed in phases. Netherlands-based Mittal Steel is also seeking mining rights in Orissa. But the tension between mining and metal-making interests will likely rage for several years and decades as both groups wrestle over rights to iron ore leasing and export licenses from state and federal governments. Mr. Sharma, who represents iron-ore mining interests on this issue, said he would like to see no captive mines for steel companies. He argues that some steel companies are just trying to corner the market and increase their margins and pricing power, rather than passing along benefits to customers. He questions whether steel demand in India will actually increase to 200 million metric tons a year by 2020, as government officials predict. He said he thinks infrastructure development and steel demand in India will grow much slower than that and suggests India develop its iron-ore business to parallel Australia, which is more export focused rather than focused on domestic steel production. He said foreign mining giants such as Australian-British miners BHP Billiton Ltd., Rio Tinto PLC. and Brazilian miner Cia. Vale do Rio Doce should be allowed to come to India for fast exploration into new iron-ore reserves. "If you don't dig iron ore, how will you make more steel and employ more people in the downstream industries?" he says. "You can't have employment within steel without producing iron ore first."