EU is pushed to act on iron ore prices

EUROPEAN steel industry body Eurofer urged European Union regulators to prevent unfair competition and excessive pricing of iron ore yesterday, saying it could hamper economic recovery in Europe.

Eurofer said market concentration by three companies controlling almost three quarters of the world market had resulted in unbalanced pricing power and a high degree of market concentration in the seaborne iron ore market.

It issued its appeal to the EU one day after top global iron ore producer Vale and BHP Billiton, the world’s third largest producer, said they would price iron ore to Japanese steelmakers quarterly from 1 April, signalling the demise of annual fixed-price deals.

It said a proposal by BHP and Rio Tinto to merge their Australian iron ore assets into a joint venture would intensify concentration in the sector, with iron ore supply being dominated by only two companies.

“Eurofer and Orgalime urge an immediate intervention by European governments to tackle competition distortions in raw material markets... in order to support the long-term future of the industrial value chain in Europe,” the statement said.