IRON ORE. Iron ore Forward curve. Iron ore forward prices (USD/mt)

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1 -11 May-11 Jul-11 Sep-11 Nov-11 Jan May-12 Jul-12 Sep-12 Nov-12 Jan-13 MT USD (Million) IRON ORE Iron ore forward prices (USD/mt) Close ( 25th) Ch. Daily Ch $ $0.08 $0.75 Apr-11 $ $2.44 $5.83 May-11 $ $2.45 $6.83 Jun-11 $ $2.46 $7.83 Jul-11 $ $2.10 $7.00 Aug-11 $ $1.90 $6.75 Sep-11 $ $1.70 $6.50 Oct-11 $ $1.77 $6.13 Nov-11 $ $1.80 $6.00 Dec-11 $ $1.83 $5.88 Jan-12 $ $1.56 $ $ $1.48 $ $ $1.39 $5.41 Apr-12 $ $1.33 $5.29 May-12 $ $1.31 $5.25 Jun-12 $ $1.29 $5.21 Jul-12 $ $1.06 $4.87 Aug-12 $ $0.99 $4.75 Sep-12 $ $0.91 $4.63 Oct-12 $ $0.85 $4.53 Nov-12 $ $0.82 $4.50 Dec-12 $ $0.80 $4.47 Jan-13 $ $1.57 $ $ $1.82 $ $ $2.08 $3.55 Apr-13 $ $2.14 $3.51 May-13 $ $2.16 $3.49 Jun-13 $ $2.18 $3.48 The iron ore paper market has had another positive backed by a slightly change in market sentiment as buyers start to show better bids and better steel prices are seen. This might be a good indicator for market direction in coming s. Iron Ore Swap prices 2010 = 0.45% Apr 2010 = 3.62% May 2010 = 4.31% Q2-10 = 4.37% Q3-10 = 4.40% Q4-10 = 3.97% Cal 12 = 3.52% Cal 13 = 2.50% *Weekly change The physical market is showing signs of buying interest. Both TSI indices ended the higher with TSI 62% Fe 1.03% and TSI 58% Fe 0.21%. Lack of physical direction impacting iron ore swaps volumes trading. SGX cleared 430,500 tons. No trades reported by LCH. Iron ore Forward curve Weekly Swap Volume , , , , , , ,000 0 $120 $100 $80 $60 $40 $20 $0 1st 2nd 3rd 4th 1st 2nd 3rd 4th Close Ch. 1 Day Ch. 1 LCH SGX Value - Close on 25 th ch

2 31-Jan % Fe 58% Fe STEEL Iron ore stockpile in the 19 major Chinese ports declined by 590,000 tons to a total of 85,490,000 tons. Umetal reported ly increases decreases for main Chinese steel products in the spot market. Rebar, Wire rod, HRC and Plate ended the down 1.33%, 0.87%, 0.96% and 0.46% respectively. The Shanghai Exchange rebar contract ended slightly lower. The two most liquid contracts, May and October, closed the at 0.42% and 0.55% respectively. Although starting the on the downside futures gained momentum towards the end of the. A World Steel Association official has stated that emerging economies will drive steel production to new records this year. It is estimated that China might see 6% growth in Rebar (SHFE) Close on 25th Change Volume % of total volume Apr contract= % % May contract= % % Jun contract= % % Jul contract= % % Aug contract= % % Sep contract= % % *Oct contract= % % *Most active monthly contract USD Spot Index (TSI) USD RMB Steel spot prices (Umetal) % Fe 58% Fe Rebar Wire rod HRC Plate Lots 1,400,000 1,200,000 1,000, , ,000 SHFE - Rebar Daily Volume Tons ('000) Weekly stockpile (Chinese ports) 400, ,

3 News Highlights Iron Ore-Shanghai rebar sags on demand view, China tightening (Reuters) Shanghai steel rebar futures fell more than 2 percent on Monday after China last further tightened the amount of funds banks can lend and on demand uncertainty. The decline in steel prices in China, the world's biggest producer, could stall a nascent recovery in iron ore prices which rose for a second day on Friday after declining for about a month. "The rise in steel prices last was pushed by traders, not end-users. We haven't really seen much cargo from our suppliers," said an iron ore trader in China's eastern Shandong province. "We need to wait and see whether real demand will pick up or not this. This is quite essential to determine which direction the iron ore market will go." Adding to demand concerns, China on Friday again raised cash reserve requirements for banks, the latest installment in its monetary tightening cycle that many had thought would be put on hold after Japan's devastating earthquake. "It's getting more and more difficult to get a loan from the bank. This will definitely impact the market," the trader said. The most briskly traded rebar contract for October delivery on the Shanghai Futures Exchange fell 2.2 percent to close at 4,653 yuan a tonne, just off the session-low of 4,652 yuan, which was its weakest level in a. It was the third straight day of losses for the contract. Indian ore with 63.5 percent iron content remained on offer in China at $170-$172 a tonne, including freight, said Chinese consultancy Umetal, as sellers hoped demand from Chinese steel mills would continue from late last. Key iron ore indexes, based on spot transactions in China, rose on Friday, but the fall in Shanghai steel futures may push down prices again this, traders said. Platts' 62 percent iron ore index IODBZ00-PLT jumped $2 to $ a tonne, including freight, and The Steel Index's 62 percent benchmark.io62-cni=si gained 80 cents to $ Metal Bulletin's 62 percent gauge.io62-cno=mb rose 81 cents to $ The indexes, which global miners use in setting quarterly contract rates, had slid 15 percent since hitting record highs near $200 in mid-ruary before regaining some ground from Thursday as some Chinese steel mills replenished stockpiles. Still, disruptions in disaster-hit Japan's steel production as well as largely ample inventories at most Chinese steel mills may continue to weigh on iron ore prices in the second quarter, said Judy Zhu, commodity analyst at Standard Chartered Bank in Shanghai. "But later this year, around the end of the second quarter, we may see China restocking and the rest of the world especially Western steel mills ramping up output in response to a recovery in demand. "So later this year we expect the iron ore market to be tightening again and prices to rebound," added Zhu. Prices of iron ore forward swaps extended recent gains on Friday, with third-quarter and fourth-quarter rises outpacing those for April-June contracts. Top iron ore miner Vale said on Friday it will stick with quarterly pricing for sales to steelmakers, even as rival BHP Billiton sells some of its material on a monthly basis and would like its contracts to move even closer to daily spot prices. Supply monopoly to keep iron ore prices high-china official (Reuters) Spot iron ore prices will remain high this year as supply remains controlled by a few big suppliers, an official from China's industry group said on Tuesday, although traders said slower demand from top buyer China may weaken prices in the near term. "Iron prices will stay high and fluctuate this year as the raw material is becoming more financialised and still in monopoly, " Liu Yinan, vice chairman of the China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters, told an industry conference. China, which houses the world's largest steel industry, has complained that big iron ore miners are trying to force spot pricing on their Chinese customers after Vale, Rio Tinto ditched a decades-old annual pricing system in favour of a more flexible quarterly scheme last year. The industry group on Thursday said China's iron ore imports are expected to rise by 6 percent, or by 40 million tonnes, this year as the country lifts steel output to meet growing demand. Liu said China's crude steel demand is expected to increase by 40 million to 50 million tonnes this year. China continues to import a huge volume of iron ore every year even as it increases domestic ore output because of the lower grade of the material at home. Last year, China's iron ore imports reached 619 million tonnes. "The use of alternatives to replace huge imports will be limited in the long run," Liu told participants at the conference organised by industry consultancy Mysteel. FURTHER FALLS SEEN Spot iron ore prices.io62-cni=si have gained more than 40 percent last year and reached record highs in mid- ruary on booming demand from China. But prices have lost 15 percent since touching all-time peaks as slow Chinese steel demand curbed buying, under pressure from Beijing's attempts to cool growth by tightening monetary policy and restricting credit. Prices may fall further before they rebound, traders at the conference said. "Iron ore prices will very likely stay weak in the short term, but the fall will not be very big and Chinese steel mills are expected to make more purchases in small tonnages to build up stocks," said Feng Shuijun, general manager at a trading unit of Sinosteel.

4 Feng said a reasonable price range for iron ore should be between $150-$160 a tonne, including freight, in the long run. Another trader from northern China said he expects Chinese steel mills to return to the market by late April after prices have fallen further. "Iron ore prices will likely hit $140-$150 a tonne in the second quarter," said an iron ore trader from eastern China. China to cut no of steel enterprises to 100 by 2015 (Reuters) China plans to cut the total number of steel enterprises to about 100 by the end of 2015 as part of an ambitious industry restructuring plan, the China Securities Journal reported on Tuesday, citing government officials. The report said plans were being drawn up to close all steel mills in southern and southwestern China and concentrate most domestic production capacity in northern, northeastern and eastern regions. The steel sector would also be developed in the far west of the country, the report said. China, the world's biggest steel producer, has long sought to consolidate the thousands of private mills scattered across the country, but strong demand has allowed industry minnows to thrive. The government now aims to put 60 percent of total capacity in the hands of the top 10 mostly state-owned steel enterprises by the end of 2015, up from about 48 percent last year. For a factbox of the world's biggest steel producers, click The Ministry of Industry and Information Technology will aim to limit capacity in the coming five years, and will try to prevent small independent mills from expanding. It is also drawing up new regulations aimed at encouraging cross-provincial mergers and acquisitions, which have routinely been blocked by local governments reluctant to lose vital sources of employment and local revenue. Industry officials have said that the Chinese steel industry will face difficult times in the next year, with demand still uncertain and chronic overcapacity making it difficult to pass high raw materials costs on to consumers. China produced 627 million tonnes of crude steel in 2010, up 9.3 percent, and industry associations are predicting a further rise to about 670 million tonnes in Atlas Iron chief sees move to monthly prices (Reuters) The change, spearheaded by BHP Billiton and slowly being adopted by other iron ore producers, follows last year's move to ditch the 40-year-old annual price benchmarking system in favor of prices set every three months based on average spot prices over the preceding quarter. Steel mills, particularly in China fought against the shift, but eventually had no choice but to accept the new regime given the dominance in supply wielded by a small number of large producers. "Over time the industry is going to migrate more and more to shorter term, one month pricing," Atlas Managing Director David Flanagan told the Reuters Global Mining and Steel Summit. Like most iron ore miners worldwide, Atlas, which was formed in 2004 to explore for iron ore and other minerals in Australia's Pilbara iron belt, was forced to sell ore at a price negotiated by sector majors Vale, Rio Tinto and BHP Billiton once a year until The three companies control about 70 percent of world's seaborne trade in iron ore. Rio is predominately selling on a quarterly basis and BHP is probably being more aggressive on the shorter time frame," Flanagan said. "Atlas has a mixture, we've got some sold on a very short term, some on a monthly basis and some on a quarterly basis," Flanagan said. Atlas expects to double its annual output of iron to 12 million tonnes in 2012 as its expands its mining and shipping operations. The company sells all the ore it mines to customers in China, but will look to add buyers in other countries, Flanagan said. "It's not necessary but we think it's a good thing to do strategic opportunities," he said. "The market is the same everywhere," Flanagan said. "Iron ore is becoming more and more a traded commodity, say like gold. It doesn't matter who buys it, it's all the same price." Mining in the Pilbara is dominated by Rio Tinto and BHP Billiton, which this year are expected to produce nearly 400 million tonnes of iron ore on a combined basis. Fortescue Metals Group is targeting an annual production rate of 55 million tonnes by the end of June. Fortescue Chief Operating Officer Neville Power this told Reuters his company also supports more pricing on a monthly basis. Brazil's Vale, the world's biggest iron ore producer has said it was sticking with quarterly pricing, at least for now. Anglo American Official: No Intention To Move To Spot ket (FOX Business) Globally diversified miner Anglo American PLC has no intention to move to the spot iron ore market, preferring its current quarterly pricing system over a monthly pricing system, the head of the company's China marketing and sales said Wednesday. Daniel Botes said on the sidelines of an industry conference that Anglo American values the stability and long-term relationships with customers that its current quarterly pricing system encourages. Global iron ore miners last year switched to a quarterly pricing system from a 40-year-old annual pricing mechanism. The switch was attributed to volatile global iron ore prices.

5 Iron ore price negotiations- Vale to stick to quarterly iron ore pricing (Reuters) Vale's global marketing director Mr Pedro Gutemberg said that Vale will not switch to monthly iron ore contract pricing and will stick to quarterly pricing. Mr Gutemberg told Reuters that "Vale is selling all contracted volumes on quarterly pricing. It is very happy with the quarterly prices and has no intention to switch to monthly prices at this time. He said that "We believe the three-month period is good enough to avoid major gaps with actual market prices and, on the other hand, smooth volatility of the monthly period." To price its contracted iron ore, Brazil's Vale uses a quarterly system in which prices are decided by a three month average of the Platts North China 62% FE CFR index beginning four months before the relevant quarter. Fortescue backs shorter iron ore pricing (Trading room) Fortescue Metals Group Ltd says it supports any move to shorten the iron ore pricing cycle, following BHP Billiton Ltd's recent call for monthly pricing for coking coal. Coking coal and iron ore are bulk commodities that are currently priced quarterly for contractual purposes between miners and their clients, and miners want to move to shorter periods to match the buoyant spot market. Fortescue chief operating officer Neville Power indicated that a move away from quarterly arrangements would be desirable. Mr Power was responding to a question from a reporter at a conference in Perth on Tuesday, about monthly or even shorter iron ore pricing. "We support very short pricing because it provides transparency in the market and fast responsiveness to the supply/demand balance," Mr Power said. BHP Billiton last year drove the move away from annual pricing settlements for both coal and iron ore to quarterly pricing when spot prices rose above benchmark prices. Analysts said this prompted steep falls in steelmakers' profits as they struggled to pass higher input costs on to customers. Japanese steelmakers last month voiced their opposition to BHP Billiton's call for quarterly coking coal pricing. Mr Power said the iron ore supply/demand balance would remain volatile for some time. Analysts told the conference that a recent pullback in Chinese steel production had softened prices for iron ore. However, Mr Power said the medium and long-term outlook remained strong, citing forecasts of growth in Chinese iron ore consumption of about 36 million tonnes per annum (Mtpa) for the next decade. A large rebuilding effort in earthquake-stricken Japan would require substantial steel and therefore iron. Mr Power said Fortescue's ch quarter iron ore production was hampered by recent cyclones in Western Australia's Pilbara region and would fall short of the company's annual production rate of about 40 Mtpa. But Fortescue's expansion to 55 Mtpa remained on track with the commissioning of an enlarged ore processing facility at its second mine, Christmas Creek in WA. "It (weather) has impacted production in this quarter," Mr Power said. "We expect that to be down to 8.25 million tonnes this quarter. "However, it hasn't impacted the commissioning of Christmas Creek too badly. "We had all of the equipment on site prior to the rain coming, so while it has slowed things on site for a while, we've managed to get back on track. "We would expect to be at the full production rate by the end of June." China to drive steel production to new records (Worldsteel) Chinese iron ore output in 2011 to rise by 13pct YoY Fortescue Metals warns iron ore output may fall short in Pilbara (The Australian) Ask a Legal Question This section, dedicated exclusively to members of IOSDA, enables members to ask a legal question (always subject to HFW terms and conditions*) on, for example, a suggested clause for a metals contract or an issue under a metal/ore charterparty. The law firm Holman Fenwick Willan LLP have offered this facility. We are assured by HFW that the first three questions received will be answered at no cost. Contact us if you are interested. *

6 17th International Iron Ore Symposium June 2011, President Wilson Hotel, Geneva, Switzerland ~ 20% discount for Iron Ore & Steel Derivatives Association members ~ Metal Bulletin Events' International Iron Ore Symposium is the world s leading iron ore event. An unparalleled group of distinguished guests gathers to hear from and meet with an industry-leading line-up of expert speakers from throughout the global iron ore community. The most important event in the iron ore industry Roberto Carvalho, Chief commercial Officer, Samarco An expert programme of speakers will discuss and debate key industry issues, giving you an insight into what is happening, where and with whom, from mine to marketplace, in this dynamic and global growing industry. Key issues to be addressed include: The future of iron ore pricing - monthly to spot, or back to annual? An insightful focus into real demand and real supply The developing role of banks in the physical market The outlook for Chinese domestic ore and its effect on Chinese sourcing Projects in Africa: who, where and when? Indian ore exports, and how traders are supplying the Chinese market The future of the indexes, will one prevail? Can steel producers use the pricing mechanism to their advantage? Whether you are a miner, trader, producer, refiner, steel company, purchaser, financier, regulator, shipping company or end-user; the 17 th International Iron Ore Symposium promises to be the biggest yet and is an event not to be missed for any serious player in global iron ore. Benefits of attending: Challenge to opportunity: change the way you use developments in the pricing system Gauge market direction from industry leaders Become an active participant in shaping the future of the iron ore industry Effectively prepare for an increase in supply Build a base to grow your business To register: To register and benefit from your 20% discount, please call the credit card hotline + 44 (0) and mention the code IOSDA to get your discount. (discount not available online)