China may Enjoy No Markdown in Iron Ore Purchase from FMG

Fortescue Metals Group (FMG) is discussing with China about whether the discount will continue in the iron ore supply in the fourth quarter of 2009, according to foreign media, citing Graeme Rowley, executive director of the third biggest iron ore supplier in Australia.

In August, the China Iron and Steel Association (CISA) and FMG entered into an agreement, under which the Australian supplier would mark down its iron ore supply 35 percent year on year to China, compared with the 33 percent markdown agreed by the world's Top Three iron ore suppliers and Japanese and South Korean steelmakers.

However, according to the statement of FMG, the precondition for the agreement is that the Chinese financial organizations and the Australian supplier should land a financing agreement involving about USD 6 billion before the end of September.

The financing agreement was not signed before September 30, but the CISA stressed that the agreement should not be linked with the iron ore supply.

Source: www.163.com (October 21, 2009)

Related terms: australia, china, executive, japan, oregon, south korea, steel, SinoCast China Business Daily news, iron ore, supply, discount, purchase, markdown, financing, precondition, China