China steel makers cut advances for 2009 iron ore import

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

30 Mar 2009

Chinese steel makers will prepay about 60 percent for the imported iron ore to be delivered this year before China Iron and Steel Association (CISA) and overseas iron ore giants reach agreement on the price, according to a report on caijing.com.cn Monday. CISA asked domestic steel plants to fix imported iron ore volume on month and prepay part of the price before the end of its 2009 iron ore price talks with BHP Billiton, Rio Tinto, and Vale, the report quoted Shan Shanghua, secretary general of China Iron & Steel Association, as saying. The prepayment usually doesn't surpass 60 percent of the negotiated price in 2008, added Shan.
The terms of payment have been carried out since January 2009.
Shan noted that the prepayment cut is mainly due to increasing iron ore supply but sharp fall of demand from steel plants both at home and abroad.
Currently, iron ore enterprises from Australia and Brazil are selling iron ore to China at cash price, which this month stayed 35-40 percent lower than the long-term contractual price in 2008.
Vale earlier denied that it had agreed to a temporary 40 percent discount on its ore supplies to China.

Source: Chinamining