TPT May 2010

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May 2010 81 ›
as 2005, on the strong urging of the Ministry of Transportation and with
the backing of Chancellor Angela Merkel, the German Parliament voted
overwhelmingly to protect Germany’s role in trade by strengthening its
system of freight transport. Less than two years later, a national strategy
was in place for integrating all transportation modes – rail, roads,
waterways – to accelerate the movement of freight across the country.
“None of this was a minor accomplishment,” wrote New Republic
blogger Julie Wagner, who hailed Germany’s determination and focus
and observed that the Germans are now well positioned to “make sure
they remain at the top of the list of the world’s top exporters.” She
particularly commended the National Port Concept: essentially a list of
priority ports that, given their national importance as trade gateways,
are to receive federal infrastructure investment funds. Modelled after
a similar initiative for German airports, the Port Concept helps to
implement the most direct connections to high-speed railways and
highways. (“Learning from Number Two: Germany and Its Exports,”
23 February)
Steel
Breaking the mould for coking-coal contracts,
BHP signs a three-month accord with a
Japanese steel maker
According to Bloomberg News, the Australian mining company BHP
Billiton has won a 55% price increase from a key Japanese steel maker
as supplies of coking coal tighten along with the global economic
recovery. Masumi Suga (in Tokyo) and Jesse Riseborough (in London)
reported that a spokesman for JFE Holdings said the Tokyo-based steel
producer will pay US$200 ($A220.25) per metric ton (mt) under a three-
month contract that commences in April. For the year through 31 March,
US$129 per mt was the price agreed upon by Japanese steel makers
and BHP, the world’s largest mining company. (“Fifty-five Percent Price
Rise a Steal for BHP,” 8 March)
Jim Lennon, a commodities analyst at Macquarie Group (Sydney),
told Bloomberg that this represents the first time a three-month supply
accord will have been signed for the vital steel making ingredient. BHP
had proposed that Asian mills accept quarterly iron ore supply accords
in place of the customary annual contracts. The JFE coking coal
settlement “signals that the Japanese are moving towards the idea of
flexibility of pricing,” Mr Lennon said.
China is the largest importer of iron ore. The Bloomberg reporters
noted that the four-decades-old iron ore pricing system was “fractured”
in 2009 after Chinese mills failed to reach agreement with suppliers. In
their view, BHP, Teck Resources (of Canada), Xstrata (Swiss), Rio Tinto
(British-Australian), and Alpha Natural Resources and Massey Energy
(both American) are among the mining companies that might expect to
benefit from more frequent pricing contracts.
Elsewhere in steel . . .
› Severstal, Russia’s biggest steel maker, announced plans
to increase capital expenditure to $1.4bn in 2010 from $1
billion last year, despite disappointing results for 2009. According
to the e-commerce marketplace AliBaba.com, Severstal’s capital
investment programme this year will focus on growth in the Russian
infrastructure and construction markets and also seek to enhance
the company’s competitive position in higher value-added markets in
the United States. The ambitious plans reflect the market outlook of