BHP’s ore pricing tweak reaps $US 7bn for Australia
CHANGES to the way iron ore is priced cost Chinese importers about $US444 million ($467.7m) a month in the first 1 1/2 years of the system, a study shows.
The campaign led by BHP Billiton to replace the benchmark system with spot market pricing was equivalent to a price increase of 7.1 per cent and added $US7.1 billion to Australian exporter revenues, according to the study by Australian National University researcher Luke Hurst that looked at the period between April 2010, when the system was introduced, to December 2011.
By shifting freight costs to the producer, it also enabled Australian exporters to reclaim the cost advantage they hold over Brazil because of their proximity to the Chinese market.
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