ArcelorMittal, the biggest steelmaker in the world, expects the iron ore price to hike by 70~80 percent in 2010 because most mills have faced a difficult time to negotiate iron ore price by soaring effect.

However, ArcelorMittal mentioned the source is from Asia that the price level is changing into different directions. Asia is leading price ahead for most of iron ore negotiation to take place and other mills will follow it after that. Mills are careful to pay attention on the iron ore contract which is long term based on prices issue.

According to ArcelorMittal, the company’s consumption of iron ore is 89.4 million tons in 2009, with two-thirds iron ore from its own mining area and long term contracts. It also indicates large-sized Asian steel mills are the key point of price decision because they often lead to negotiate with mining firms.

However, the prices of raw material are increasing rapidly is no good for buyers neither mills because demand and supply effect is not always balance to follow.

(source: Yieh corp)