Network Metals LLC

With steel prices still in the doldrums, news was worse than expected (but not altogether surprising) for iron ore contract settlements. Nippon Steel (TYO:5401) settled with Rio Tinto (LSE:RIO) on iron fines at a 33% drop in price, and lump settled at 44% below the previous contract price. We expect Vale (NYSE:VALE) and others to do better than Rio with Nippon, however, as Rio’s premium for specialty products has diminished with the declining steel market. Also we have not heard anything from Chinese mills yet, but we understand they are targeting a 45% drop for lump.