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Japanese steel mills reach deal with Rio Tinto to increase iron ore prices

by：Gewinn 2022-05-06

According to the 'Nikkei News' report, Nippon Steel, JFE Steel and other major Japanese steel manufacturers reached an iron ore price agreement with Rio Tinto on Monday, accepting a 96.5% increase in lump ore prices and a 96.5% increase in fine ore prices. Up 79.88%. BHP Billiton is said to be asking for the same increase. In this year's negotiations, Rio Tinto has been asking for a 96.5% increase in lump ore prices and a 79.88% increase in fine ore prices, and has successfully reached an agreement with China Baosteel Group on June 23. Japanese steelmakers import about 60% of the iron ore they need from Australia and nearly 20% from Brazil. In February this year, Japanese steelmakers reached an agreement with Brazil's Vale to increase ore prices by 65%. The price increase reached this time with Australia's Rio Tinto is much higher than the 65% increase with Vale at the beginning of the year. For the Japanese steel industry, the price hike will translate into an additional cost of about 100 billion yen. The largest steel user of steel is the automotive industry, and steel prices are negotiated on an annual basis, so it will be difficult for steel companies to pass the cost on to automakers in the future. This means that steelmakers will try to increase the selling price of steel to shipyards, the construction industry, electrical machinery and big retailers to partially compensate for the extra cost.

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