Japan Steels Fail to Settle Iron Ore Price for F2006

Japanese major steels including Nippon Steel could not agree with major iron ore miners in the third negotiation for contract price in fiscal 2006 starting April. They cannot fill the gap of the market view when the miners argue tight supply supports price hike while the buyers see the balanced supply. They are likely to take more time to settle the price negotiation.Japanese major steels had talks with Hamersley Iron of Australia before last week and with BHP Billiton of Australia last week. They will have another talk in or after late March. The steels keep talking with Tokyo office of CVRD of Brazil.World seaborne iron ore trade increased by 60 million tonnes to 650 million tonnes in 2005 from 2004, according to estimate by British ocean information service provider of Clarkson. The trade volume is expected to increase by 40 million tonnes to 690 million tonnes in 2006. The demand is expected to increase but slow down the increasing pace compared with 2005. The sensitive expectation causes mixed views by miners and steel makers along with uncertainty for Chinese demand.