In Japan, Bloomberg reports that JFE Steel has signed coking coal contracts at $200 per metric tonne (55% increase) with BHP Billiton Mitsubishi Alliance and this contract is for the April-June period, implying that quarterly contracts have come through. Historically the settlements reached by the Japanese steel mills tend to be accepted globally. And China’s Angang Steel said Chinese steel makers may have to accept a price increase higher than the 20 percent they expected for this year. How does 55% sound, China?
And then there’s the price of iron. First, everyone was expecting a 55% rise in iron ore prices. Then a trial balloon went up for a 70% rise in iron prices. Now, Rio and BHP are pushing for an 80% hike in iron ore prices.
The New York Times also reports …
A Chinese media report this week that global miners are offering Chinese steel mills a 50% rise in iron ore prices has been dismissed by analysts as posturing.
Ouch! Snap! So, China was trying to say, “no no, we won’t pay 80% more.” And BHP and Rio are saying: “Yes, yes you will, and you’ll like it.”
So how can coking coal, iron and therefore steel prices be rising when the U.S. is still mired in recession? Well, as I’ve explained, the U.S. is passing the baton of global leadership. And we could see commodity prices go MUCH higher even if we aren’t buying a lot of new stuff here in the states. In fact, that’s the theme of my new service, Crisis Profit Hunter. That’s why we focus on commodity stocks, and I especially like commodity stocks that pay nice dividends (if the U.S. market underperforms, dividend-paying stocks should outperform).
The first issue of Crisis Profit Hunter just hit the presses, AND it comes with four bonuses, all of which have actionable recommendations. The next crisis is around the corner. Isn’t it time you got onboard with Crisis Proft Hunter?
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