Baosteel wins 35% discount on iron ore from Fortescue

Although Chinese steel mills have been holding out for as much as a 45% discount on iron ore, Baosteel Group and other mills settled for a 35% reduction in iron ore prices from Australian miner Fortescue Metals Group, Bloomberg reported. The new prices will take effect in the second half of 2009. The mills will pay US$0.94 per dry metric ton unit for fines and 100 cents per dry metric ton for lump iron ore. Fortescue and sovereign wealth fund China Investment Corp (CIC) have recently been considering an agreement wherein CIC would fund the miner’s expansion to produce nearly 100 million tons of iron ore annually by 2012.