BHP, Rio Tinto in talks with China mills to set Q4 Iron Ore lump premiums

Metal Recycling News  |  2012-09-26 07:42:07   |   By

To set iron ore lump premiums for the fourth quarter, Australian mining giants BHP Billiton and Rio Tinto are in talks with Chinese steelmakers, says sources.

BEIJING(Scrap Monster): To set iron ore lump premiums for the fourth quarter, Australian mining giants BHP Billiton and Rio Tinto are in talks with Chinese steelmakers, says sources.

A standard quarterly lump premium with customers has not been fixed by BHP Billiton. They have a more flexible method of negotiations with contractual customers. A quarterly lump premium price is applicable for some customers while for others, a monthly lump premium price is set.

The fourth quarter lump premium is still negotiated by BHP Billiton, but the discussions are in the range of $0.06-0.07/dry mt unit according to sources.

Source from a northern Chinese mill said they had negotiated a fourth quarterly lump premium of $0.08/dmtu with BHP Billiton. The mill was still in talks with Rio Tinto to settle the fourth quarter premium, he added.

Eastern China mill is currently discussing the lump premium levels with both BHP Billiton and Rio Tinto, and had not fixed anything yet. The mill fixes the lump premiums on a monthly with BHP Billiton sources said.

Lump premiums for third quarter contracts has been settled with Chinese mills by BHP Billiton at around $0.1/dmtu. Sources at Rio Tinto's Perth and Singapore offices declined comment.