Japan Integrated Steels Agree with MMTC on Long-term Iron Ore Purchasing

Japanese major integrated steel makers including Nippon Steel agreed with MMTC of India on the renewal of the long-term iron ore purchasing contracts on Wednesday. The integrated steels will import totally 3.47-6.75 million tonnes of iron ore per year from MMTC during 5 years to fiscal 2010 ending March 2011. The integrated steels can secure all of required iron ore by only long-term contracts thanks to the contracts renewal. They also agreed to import 3.47 million tonnes of iron ore from MMTC in fiscal 2006, the minimum volume per year along the contract, and to raise their purchasing prices by 19% in fiscal 2006 from fiscal 2005.Japanese integrated steels contracted with MMTC to import 5.21-9.15 million tonnes of iron ore per year during 5 years to fiscal 2005. The iron ore import decreased to 4 million tonnes in fiscal 2005 under the specific situation that Kudremukh mine was closed converted into a national park. Japanese integrated steels could secure specific amount of iron ore import even when MMTC is leaning to supply more iron ore to Indian steel makers which recently expand their crude steel production sharply.The contracted fine ore price between Japanese integrated steels and MMTC for fiscal 2006 is FOB US 71.64 cents per dry metric ton unit, which represents US$ 46.6 per tonne for ore with 65% Fe produced at Biladila. The lump ore price is US 92.34 cents. The prices followed the level of the agreement between Japanese integrated steels and Australian and Brazilian major iron ore suppliers.