News Room - Steel Industry

Posted on 19 Jan 2009

Nippon Steel, Posco Will Cooperate on Ore and Coal Contracts

Nippon Steel Corp., the world’s second- largest steelmaker, said it will cooperate with South Korea’s Posco in talks with suppliers over iron ore and coking coal contract prices for this year.

 

“Sure, we already have alliance with Posco,” Akio Mimura, chairman of Tokyo-based Nippon Steel told reporters in Seoul yesterday when asked if the company plans to cooperate with the Korean steelmaker in raw material negotiations with miners. They have not started talks yet, he said without elaborating.

 

Baosteel Group Corp., China’s biggest steelmaker, started talks to set annual contract prices with Rio Tinto Group last week in Shanghai. Prices, which have risen the past six years to a record, may fall 30 percent, according to a Bloomberg News survey of 11 analysts last week, trimming profits for London-based Rio and BHP Billiton Ltd. of Melbourne, the world’s No. 2 and 3 iron ore exporters respectively.

 

Coking coal producers from Australia, Canada and Russia will begin talks with steelmakers next week in Japan to settle contract coking coal prices for the year starting April 1, the Tex Report said on Jan. 16 without citing anyone.

 

Goldman Sachs JBWere Pty predicts annual contract prices of coal will fall 60 percent and iron ore 30 percent from April.

 

There may be a “wide gap” between prices that steelmakers and miners want for this year’s contracts when talks begin, Lee Ku Taek, outgoing chief executive of Pohang-based Posco, said on Jan. 15.

 

Nippon Steel does not plan to shut down a blast furnace at the moment because of weakening demand, Mimura also said.

 

To contact the reporter on this story: Sungwoo Park in Seoul at