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Rio Tinto (RTP) and China Send Iron Ore Prices Up 96% in One Week

Posted June 25, 2008

“Anyone who thinks China’s insatiable hunger for metals is going to subside any time soon need think again. On Monday it was announced that Chinese steelmakers have agreed to a new contract with Rio Tinto (RTP:NYSE) for the price of iron ore, which saw a 96.5% rise on last year.” — Dominic Frisby

by Dominic Frisby

Baltimore – (TFN): This week we saw a 96.5% rise in the price of iron ore. Yes, 96.5%.

The oil price has refused to budge below $130 a barrel, despite Saudi pledges to increase production and the best efforts of those two fixers, George Bush and Gordon Brown.

And Her Majesty’s Treasury released this summer’s must-have beach-read - a 70-page document entitled, ‘Global commodities: a long-term vision for stable, secure and sustainable global markets.’

The commodities boom is not rolling over. In fact, it is gathering pace.

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Anyone who thinks China’s insatiable hunger for metals is going to subside any time soon need think again. On Monday it was announced that Chinese steelmakers have agreed to a new contract with Rio Tinto (RTP:NYSE) for the price of iron ore, which saw a 96.5% rise on last year.

Like coal and oil, the price of iron ore is not set in any futures market, so governments and lazy journalists cannot make any wild claims that speculators are somehow to blame for this one. Rather, an annual contract is agreed between the major producers [BHP Billiton (BHP:NYSE) and Rio in Australia and Companhia Vale do Rio Doce (Vale) (RIO:NYSE) in Brazil] and the major steel makers (China) and that tends to become the guide price for the year. Read on to learn more.

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Posted by Dominic Frisby · Filed Under Gold and Resources 

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