Japan Major Steel to Start Pre-talk for Iron Ore Price Negotiation

Japanese major steel makers including Nippon Steel and JFE Steel start pre-talk with major iron ore suppliers today for price negotiation for fiscal 2008. They exchange the market view on world economy and iron ore supply and demand balance before negotiation. Iron ore supply is tight due to growing demand especially in China. World major steel makers already announced price hike for steel products to cover potential higher cost for major iron making raw materials. The iron ore negotiation is expected to be hard for steel makers after hikes for 5 years in a row through fiscal 2007. Japanese major steel makers start the talk with Rio Tinto and BHP Billiton in the week and will have talk with CVRD next week. They apparently don’t enter into price talk at the stage as usual. They try to find the factors to determine the price level.