Marketplace has a new podcast for kids, "Million Bazillion!" EPISODE OUT NOW

High iron ore price reflects demand

Stephen Beard Jun 24, 2008
HTML EMBED:
COPY

High iron ore price reflects demand

Stephen Beard Jun 24, 2008
HTML EMBED:
COPY

TEXT OF STORY

Renita Jablonski: The Federal Reserve starts a two-day meeting today. Chair Ben Bernanke and the rest of the Fed will talk a lot about inflation, but not many people expect to see a change in the key interest rate.

Worries about inflation are global. British mining giant Rio Tinto has just pushed up the price of its iron ore by almost 100 percent. From London, Stephen Beard reports.


Stephen Beard: Rio has just pulled off the largest annual hike in the price of its iron ore. The company is charging its Chinese customers an extra 96.5 percent. The massive increase reflects booming demand for ore.

Steelmakers in China, India and South Korea are scrambling to get their hands on the stuff. The miners are struggling to keep up. The price rise is bound to feed through into the cost of a whole range of products.

Javier Blas is a mining correspondent with The Financial Times:

Javier Blas: From cars to construction reinforcing rods to machinery. All that is in our daily lives that is made of steel is gonna go up.

He says Rio’s price hike is interesting for another reason. There’s very little financial trading in iron ore. It’s just miners and steelmakers doing business. The soaring price cannot be blamed on speculators.

In London, this is Stephen Beard for Marketplace.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.