Index-linked quarterly iron ore contracts were first agreed
earlier this year. Pretty much everyone agreed that this was
just the first step in a move towards even more flexible
pricing. But the pace of this change has been a surprise.
Macquarie Research believes third quarter contract prices will
be higher than spot prices as soon as July. (MB Jun 30) If this
is right, steelmakers will be sorely tempted to abandon
quarterly contracts very soon after their inception. On June 30
Metal Bulletin’s Iron Ore Index (MBIOI) calculated
at $135.5 per tonne cfr Qingdao on a 62% basis, down $2.38 on
the day before. India-origin 63.5% Fe cargoes sold for $143-145
per tonne cfr main China port. Rio Tinto and BHP Billiton are
expected to ask for $147...