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ArcelorMittal Disfavor Iron Ore Quarterly Pricing- 29 Jun 10

A final shift from annual pricing to quarterly mode will bring no good for steel mills, said Mr. Lakshmi Mittal, CEO of world largest steel mill ArcelorMittal on Steel Success Strategies in New York.
He said that without annual iron ore contracts, steel enterprises could not settle the annual supply price for steel users, and the market will be more "dangerous''.

Mittal believed that China''s robust demand provides the basis for steelmaking metallics quarterly deal. Chinese iron ore production can not carry up with rapid development in steel operation, and the nation''s iron ore imports hit a record in succession, which as a result fires spot market. "Miners see the chance and successfully hold out the quarterly pricing," Mittal said.

As Mittal introduced, China''s 4-trillion RMB spendings helped the more-than-expected recovery for the country''s economy, and even jacked up the steel industry. However, he mentioned that "the recovery pace is slow".

Mittal predicted that China''s steel capacity addition will reach 60 million tonnes in 2010, and another 40 million tonnes will happen in 2011. "If China''s investment into capacity expansion is excessive, the move will play negative impact on industry development," he highlighted.

Mittal showed that Europe''s debt crisis and loan cuts will drag down the pace of global economic recovery. He made a projection that global steel demand will increase by 10 percent this year and the developed economies will not see the complete wake-up until 2012.

(Compiled by Steelhome.cn)

Jun 29, 2010 10:34
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