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Auto industry concerned by price hike in iron ore

Date

31 Mar 2010

Sections

Transport

 Brussels,  31  March  2010  –  The  European  automobile industry is very
  concerned  by the sudden and massive increase in the price of iron ore, a
  crucial  material  for  producing  steel.  The leading iron ore exporters
  announced,  yesterday, steps to raise their prices by more than 80%. Such
  excessive   and   unpredictable   pricing   policy   would   affect   the
  competitiveness  of  manufacturing  in  Europe,  including the automotive
  industry.

 

The   automobile   industry  needs  broad  access  to  raw  materials  at
  competitive   conditions,   especially   in  times  of  fragile  economic
  circumstances.  With  roughly  one tonne of steel per car, the automotive
  sector  is  a  major  client  of the steel industry and – hence, iron ore
  exports.  Cost  pressure  in  the  sector  is  already  high due to large
  investments  in  environmental  and  safety  technologies, while economic
  recovery and consumer demand are still slow.

 The  main iron ore exporters are Australia’s Rio Tinto, Brazil’s CVRD and
  Australia  BHP  Billiton  (often called the ‘big three’). Major producers
  like  India  and  Russia  hardly  export  their iron ore. The ‘big three’
  represent  around  70% of the exports of iron ore and, subsequently, hold
  the  significant  pricing power of an oligopoly. In addition, BHP and Rio
  Tinto  have announced their intention to create a joint venture and merge
  their Australian iron ore productions, leading to further concentration.

 

 ACEA,  the  automobile  industry’s  trade  association, asks the European
  Commission  and Member States to urgently use all appropriate channels to
  tackle  distortive  developments.  ACEA also encourages the EU to rapidly
  develop  and implement a raw materials strategy to ensure a level playing
  field  on the world’s raw material markets and facilitate broad access to
  raw materials from third countries at competitive conditions.

 

 About ACEA

The   European   automotive   industry   is   key  to  the  strength  and
  competitiveness  of the European economy. The ACEA members are BMW Group,
  DAF  Trucks,  Daimler, FIAT Group, Ford of Europe, General Motors Europe,
  Jaguar  Land  Rover,  MAN  Nutzfahrzeuge,  Porsche,  PSA Peugeot Citroën,
  Renault,  Scania, Toyota Motor Europe, Volkswagen and Volvo. They provide
  direct  employment to more than 2.3 million people and indirectly support
  another  10  million jobs. Annually, ACEA members invest over €26 billion
  in R&D, or 5% of turnover.

 

For further information, please contact Sigrid de Vries, Director

Communications, ACEA   +32 2 738 73 45 or sv@acea.be

Please also visit www.acea.be

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