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This used to be “game over”: one of the big three miners would announce the price at which it would sell iron ore to a big steelmaker for the year. The rest of the industry would then shrug and fall in behind. But Rio Tinto’s settlement on Tuesday with Nippon Steel, swiftly followed by deals with Kobe Steel, JFE and Sumitomo, may not be the end of this story.

For one, the customers are Japanese. In 2007 and 2008, the first announced settlement was with a Chinese steelmaker. That was as it should be: China imported 444m tonnes of seaborne iron ore last year, more than Japan and Europe together. China’s Iron and Steel Association has consistently said it wants a cut of about 45 per cent, compared with the 33 per cent Rio has agreed in Japan.

For another, the first settlement means less than it used to. Last year, Vale unilaterally declared in February with a 65 per cent hike. Rio then took the extraordinary step of saying it could do better – and did, securing an 85 per cent rise. Increasingly, producers are acting independently, pushing volumes on to the spot market, now used for a third of all trade in seaborne iron ore, versus zero a few years ago. The increasing popularity of more flexible hybrid contracts is another sign of the settlement’s waning importance.

Finally, the deal looks a little too tailored to act as a global benchmark. For Nippon, the implied $72.50 per tonne, including freight costs, is a 7 per cent premium to the spot market – a small price for guaranteed supply. As for Rio, it is still digging it up in the Pilbara at a cost of about $42 per tonne, and selling at $62 – a respectable operating profit margin. The Chinese will want to drive a harder bargain. The saga between Chinalco and Rio is just one reason to believe they will succeed.

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