European steelmakers criticised on Thursday a recent 65-percent increase in ironore prices, warning that market power of a handful of mining giants was driving prices higher.
"Over-concentration in the supply chain of steelmakers has resulted in an explosion of prices," said Gordon Moffat, director general of the Eurofer trade association representing European iron and steelmakers.
"Ultimately, these extra costs will have to be passed on to the consumer," he added. "This will inevitably result in higher prices for steel in Europe and worldwide."
Earlier this week, Brazilian mining giant Vale obtained a 65-percent increase for the price of the ironore it supplies to its Asian clients in a deal widely expected to be followed by other miners.
The global supply of ironore is currently dominated by only three mining companies, with Vale sharing the market with BHP Billiton and Rio Tinto, the world's second and third-largest iron producers,
BHP Billiton is currently in the midst of a hostile takeover bid for Rio Tinto, which Eurofer firmly opposes because it fears the merged company would control 75 percent of the ironore market.
"The price rise of 65 percent which has just been announced comes before the proposed merger," Moffat said. "Imagine the pricing power which these suppliers will have when trade is dominated by just two companies."
Leading world steel producer ArcelorMittal announced on Thursday a second price rise in two weeks, saying it would increase prices for flat steel in Europe owing to a leap in ironore costs.
Demand for ironore, which is one of the main raw materials for making steel, is soaring as fast-growing emerging economies such as China consume huge and growing amounts of steel.
But Eurofer warned that it not only faced pressure on ironore but also coking coal, with half of the market controlled by Rio Tinto and BMA, a joint venture between BHP and Mitsubishi.
This may well be the way for many small refineries to go if the price of Iron Ore keeps going up. If you have people that need iron ore offer them the alternative solution and watch your profits soar.
Quoting from [WSBinc]:
Replying to [lovechina]:With the cost of Iron Ore skyrocketing many people will need a low cost alternative. I have found what I beleive to be a wonderful solution, partially processed low grade iron ore otherwise known as copper slag. Copper slag has 40.5% iron ore and can be purchased for $23 mt FOB. I just recently got one of our clients into a contact for this which took a while do to them needing to test it first.which after smelting it down they were able to extract the iron.
This may well be the way for many small refineries to go if the price of Iron Ore keeps going up. If you have people that need iron ore offer them the alternative solution and watch your profits soar.
I feel the sugestion as given for using copper slag will not deliver.The silicate of Fe present in copper slag is so complicated that reducing it for getting Fe metal is not possible or it will be too costoy and time consuming.
If however it has been fruitfully used we will request that details may be published so that we can all start using this material which is abundantly available.
Thanks
Birinder Singh