Japan Consumers and BHP Billiton Agrees on Mn Ore Price Down

Nippon Steel and Nippon Denko reached an agreement with BHP Billiton on Thursday to decrease the manganese ore purchase price by 10% for shipment in fiscal 2007 starting April 2007 from previous year. The purchase price decreased for 2 consecutive years. The agreement showed that higher manganese ore price is adjusted when the spot market price decreased more than log term contracts price as the rebound. The contracted price would decrease to FOB US$ 2.7 per dry metric ton unit, which represents about US$ 130 per tonne for ore with 48% Mn. The purchase price achieved highest to increase by 62.9% in fiscal 2005 from previous year, which increased over twice from fiscal 2003. The purchase price decreased by 24.5% in fiscal 2006 from previous year. However, it increased by 37% from fiscal 2002 when manganese market price was low. Japan imports manganese ore at 1 million tonnes per year. Japanese purchase cost would decrease by 1.7 billion yen for shipment in fiscal 2007 for ore with 48% Mn on current yen rate.