Steelmakers Agree to 65% Iron Ore Price Rise: Crazy or Cool?

Replying to [Admin]:

This is crazy but you can not avoid such things when we are all fighting for finite resources. I have seen the spot Indian iron ore price rising from $58 to $140 FOB within 8 months of time. This is due to monopoly of only three corporate miners supplying 70% of sea born cargo, phenomenal rise in bulk freight and port handling/infrastructure saturation in Brazil and Australia.

It will have spiraling effects on products using iron and steel. This will start from construction re-bars to steel plates used in cars, fridges, toys, equipments and machineries. The cost escalation will be transferred to other industries and ultimately to the consumer market.

The only way to circumvent is the iron ore consumers should go in for captive mining and new mines development in untapped areas like South America and Africa.

Replying to [Admin]:It is not at all cool, as it affect our business to a greater extent.

I am unable to understand where we are heading to

hehe.. it is really crazy , it traggers everything to increase besides the iron material , say iron powder cores , magnetic material , and then , you will find the price of TV goes up , the cost of beef goes up , you have to spend more time at home instead assembly with your friends .... what a pity !!!!! what is going on in the world ?

Replying to [cyber chap]:
there's also in Libya... CIF $150

Replying to [Admin]:

Of course this affects the profit margins, almost all the raw material cost is raising and big challenge to the manufacturers! With other factors, the business is getting harder and tough, hehe!

We, the suppliers and buyers should consider and understand each other but cannot be so rigorous!

It is just absolute madness.
Iron Ore goes up, thus steel prices go up.
That means everything that has any steel component in it will also go up, even the humble key-ring.
Oil is up, thus fuel goes up, plastic goes up.
Once again, the humble key-ring is hit twice, both steel and plastic.
Fuel is up, therefore shipping rates go up, transport rates go up.
All this compounds into not just a price increase in
1.Raw materials,
2. Transport costs from raw material factory to manufacturing factory,(truck fuel)
3. From factory to the port, (truck fuel)
4. From Shipping Port to Destination country (Ship fuel)
5. From Destination Port to Customer (trucking fuel)

So, add all that together, and you have a HUGE increase.
As an example, one humble key-ring we purchase regularly has DOUBLED in price in the past 12 months.

Replying to [Admin]:I know your feeling, but we,,just the dividual can't change the market. I have the same job as you. In my own opinion, we just cut down the cost based on the same quality, save the daily expense of the company. If so, I think you will get the maximal profit.

Replying to [Admin]:The iron ore price rise for we,a machinery manufacturing company,is a crazy news.Our machinery is made of steel.The iron ore price rise,so our machinery price should rise,but how to explain to our customers.I am afraid it will affects our business.God...

Replying to [Admin]:yes ,the iron ore price is more higher than before .It is really a bad news to all the manufactuers related with steel .In a short period ,this situation will affect all our business .When one problem has become a common quetstion to us all ,then all us will bear the pressure .so just calm down,keep attention on it ,then decide how to do when facing this situation!

Replying to [Admin]:

The price of Steel has gone up dramatically and I think it will have a negative affect to the manufacturers and end users in general.

As an trader (importer/exporter) and raw materials consultant, I have seen the prices shoot up like crazy and what I am experiencing at the moment is, there are so many buyers who do not realize the price have gone up so much. It is not that we are charging crazy margins or unreasonable profits. The fact is, apart from raw material prices rising, the cost of Oil has also gone up. So, even the freight charges to ship from China to other Countries are sky high.

And still, nonetheless, the end buyers of the product think that maybe the factory is taking advantage of the price increase...they buy raw materials at low cost and increase their price to maximize profit margins. This is not true but many buyers have this mentality. Sometimes, it is frustrating.

Furthermore, there are the brokers and buyers who ask for prices that are out of this world. For example, as a chrome ore exporter, I was asked for a price of 150USD/DMT of 36% minimum Chrome Ore, CFR to China - I don't know where in the world anyone can find this price at this point in time.

In general, I think the price increase is unfortunate for us traders, manufacturers and end users. The only people who really benefit in this price increase are the major steel moguls in the business who do the mining and manufacturing.