POSCO agree 33 pct cut in iron ore price with Rio Tinto

SEOUL, May 28 (Yonhap) -- POSCO, the world's fourth-largest steelmaker, said
Thursday that it has agreed a 33-percent reduction in contract prices with Rio
Tinto Group, the world's second- largest iron ore exporter, heralding further
cuts in steel prices.

Under the agreement, retroactive to the contract that began on April 1, POSCO
buys iron ore for US$58.2 per ton, down 32.9 percent from last year's level,
according to POSCO.
POSCO has been demanding a deeper cut of up to 50 percent in contract prices, but
global iron ore exporters wanted a cut of around 20 percent.
POSCO, which imports up to 50 million tons of iron ore annually, is expected to
reach an agreement on contract prices of iron ore with other major iron ore
exporters such as BHP Billiton and Vale.
Shares of POSCO were trading at 400,500 won on the Seoul bourse as of 11:47 a.m.,
up 1.39 percent.
Prices of iron ore, from which metallic iron can be economically extracted, have
been falling as demand dropped in line with the global economic slump.
Decreased iron ore prices could help boost margins for steelmakers, analysts said.
Early this month, POSCO slashed prices for all its steel products by 20 percent
to reflect falls in the cost of raw materials.
sam@yna.co.kr
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