Iron ore prices may increase, CISA declares
SHANGHAI - Prices of iron ore, trading near a two-year high, may continue to climb and lead to production cuts and losses for Chinese steelmakers.
The raw material price may keep rising in the second and third quarters, Deng Qilin, chairman of the China Iron & Steel Association, said yesterday in an interview in Beijing while attending a conference. Jiangsu Shagang Group Co, the nation's fifth-largest steelmaker, will consider reducing production on higher costs, Chairman Shen Wenrong said at the conference.
The global economic recovery has spurred demand for iron ore and allowed Vale SA and BHP Billiton Ltd this year to break with a 40-year custom of selling on annual contracts and win a 90 percent price increase for quarterly sales starting April 1. Crude steel output in China, the largest maker, jumped 25 percent in the first quarter.
