Steelmakers wary over rising iron ore prices

Global steelmakers are becoming increasingly concerned about the surge in iron ore prices imposed by miners in new contracts that are 80 to 100 per cent higher compared to the current prices.

The European Confederation of Iron and Steel Industries (Eurofer) which represents the interests of 23 EU member states and accounts for around 200 million tonnes of steel production per year, has notified the European Commission about possible anti-competitive practices and abuse of dominant position by the main iron ore suppliers.

The three iron ore mining giants Vale, BHP Billiton and Rio Tinto supply over two-thirds (68.5 per cent) of the global sea-borne market with Vale accounting for nearly a third (32.8 per cent) of the global supply, according to 2008 World Steel Association data.

''As stated by Eurofer already, the price increases of 80-100 per cent demanded by iron ore producers do not reflect the realities of the steel market and cannot be justified by demand conditions for iron ore,'' the director general of Eurofer Gordon Moffat said in a statement.

''That is why we are calling upon the Commission, as regulator, to examine closely what is happening among iron ore supplier,'' Moffat said.

Eurofer said that under the present circumstances, the proposed joint venture between BHP and Rio Tinto is unacceptable.