Chinese Getting A Bargain On Iron
By Zacks Investment Research on March 27, 2009 | More Posts By Zacks Investment Research | Author's Website
According to Shan Shanghua, general secretary of the Chinese Iron and Steel Association (CISA), some mining companies reached an agreement with Chinese steel producers to provide a discount of 40% over the prices of iron according to the 2008 contract. The new iron ore price for 2009 remains under negotiation.
Mr. Shanghua refused to declare which big mining company accepted the deal; however other CISA source declared that Vale do Rio Doce (RIO) accepted it. The deal is retroactive to January 2009.
We believe the announcement is a good indication of the iron ore definite price that is under negotiation. We continue to expect a price reduction of iron ore for BHP Billiton (BHP) and Rio Tinto (RTP) of around 40% for 2009 and for Vale (RIO) of around 30%, as Vale had a lower price increase in 2008.
Considering that level of price correction, we see no reason to change our current Hold recommendation on Vale.
US Unemployment Rate Troubling, But …
S&P 500: Market Is Strong, But Correction Should Continue
Doctor Up Your Portfolio With This Medical Communications Company
Cartoon: It’s Still The Economy, Stupid
Dendreon Corp.: Put This Promising Biotech Stock On Your Watch List
Macedonia’s Jan.-Sept. Trade Deficit At US$1.61 Bln - 1 day ago
Natural Gas Prices Extend Two-Month Low - 1 day ago
Stocks Finish Modestly Higher Despite Weak Jobs Report - U.S. Commentary - 1 day ago
Treasury Economist: Unemployment Numbers Disappointing But Not Unexpected - 1 day ago
Consumer Credit Fell By $14.8 Bln In September - 1 day ago


