Company News

UBS sees iron ore price up 55 pct in '08 contracts

NEW YORK, Feb 1 (Reuters) - Investment bank UBS predicted on Friday that global steel companies will end up paying 55 percent more in 2008 than 2007 in tense contract negotiations now under way with major mining companies.

In a research note, UBS said it believes that mining companies are looking for a 70 percent increase in contract pricing while steel makers are insisting on 30 percent.

“We believe that the dynamics of the iron ore market remain firmly in favor of the mining companies. Spot prices for iron ore continue to trade roughly 200 percent higher than the 2007 contract level. We have raised our price increase assumption for the upcoming 2008 contract to 55 percent from 35 percent,” it wrote. (Reporting by Alden Bentley)