Tokyo, Japan — MININGREVIEW.COM — 15February 2010 – The world’s biggest mining company “’ BHP Billiton “’ has proposed to Japanese steelmakers a shift to a quarterly pricing system from the current annual price-setting regime for iron ore and coking coal.
Making this statement in an interview here with the Nikkei business daily, BHP chief executive Marius Kloppers said: “The traditional annual price negotiation system has become outdated due to wilder fluctuations in steel demand and foreign exchange rates.”
Japanese steelmakers are opposed to a shift to a shorter contract period, saying frequent changes in costs would hurt the business of its customers. Major customers for Japanese steelmakers such as Nippon Steel Corp include auto makers, shipbuilders and electronics manufacturers.
But the Nikkei quoted Kloppers as saying that it was not acceptable to continue using the existing system just for iron ore and coking coal, now that the pricing mechanism for fuel coal had been shifted to a market price-based system.