Goldman Sachs JBWere Pty said that Asian steelmakers may want to settle annual contract iron ore prices with suppliers including BHP Billiton Ltd and Rio Tinto Group sooner rather than later as the spot price are increasing.

Goldman analysts led by Mr Malcolm Southwood said in a report that “With spot iron ore now trading at a theoretical premium of 80% to the Japanese contract price there must be a growing motivation for mills to lock in contract prices sooner rather than later. Mills may concede bigger price hikes than our plus 20% forecast for Australian ore.”

Iron ore suppliers hold annual talks with steelmakers to fix contract prices for the 12 months from April 1, the start of the Japanese financial year.

(Sourced from Bloomberg)