Tuesday, February 19, 2008

Some folks would consider it a steel

Greed is good, but ...

Rio says 65% price rise is not enough
The percentage gain was the second largest on record and at the high end of market predictions, which had already risen several times in recent months due to tight supply.

But Rio, under threat of a takeover by BHP Billiton, last night said it planned to seek an additional freight premium, because it is cheaper to ship iron ore from Australia to Asia than from Brazil to Asia.

In a statement, Rio said it intended to seek at least the 71 per cent increase Vale would receive for its premium Carajas ore, which is of a higher grade than Rio and BHP's Pilbara products.

Booming minerals prices will flood the Australian economy with billions of extra dollars in export earnings this year, making it more difficult for the Reserve Bank to cool growth and increasing pressure on interest rates.

Coincidentally, Malcom Maiden played along with the pun.
Minutes of the Reserve Bank board's meeting on February 5 released today will further steel the Australian market for another interest rate rise.

the minutes reveal that in its discussion, the board noted "that a good case could be made for a larger move" - partly because the rise in inflation that had already occurred was almost certainly embedding expectations that inflation was accelerating: expectations that could in turn induce companies to push for price increases, and workers to push for wages increases.

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