Talks on a benchmark 2009 iron ore price are likely to end next month, setting a price somewhere between 2007 and 2008 levels, the founder of Australia's No.3 iron ore miner said on Friday.
I expect it will come in between 2007 and 2008 prices. That will leave enough margin on the table to keep the iron ore industry going and it will also mean ... China becomes more and more competitive, Fortescue Metals Group Chief Executive Andrew Forrest said.
Global miners and steel firms are locked in annual talks to settle iron ore term prices for the year starting on April 1 and analysts are lowering their price forecasts as a slowing global economy is set to cut steel output sharply.
It could go on all the way through April and May and I would expect by May it would be finalised, Forrest told Reuters in an interview on the sidelines of the Boao Forum in China.
Forrest's prediction of a May deal, however, suggests the miners are confident China's steelmakers will want to lock in prices, as the country's economy is showing signs of picking up.
While China's economic growth in the first three months was the weakest of any quarter on record, urban fixed-asset investment growth surged unexpectedly to 28.6 percent from the year-ago period and annual industrial output growth rebounded to 8.3 percent in March.
China's iron ore market will continue to grow strongly in 2009, 2010 and 2012, Forrest said.
Australian iron ore prices leapt around 80 percent in 2008 and about 65 percent for Brazilian ore, but spot prices have slumped since late 2008 as demand for everything from autos, major infrastructure projects and housing collapsed.
($=6.83 yuan) (Reporting by Kirby Chien; editing by Sue Thomas)
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