Iron Ore Speculators 'Serious Threat' to Global Economy
Changes in the pricing system for iron ore have opened up possibilities for speculators, warns the CEO of steel producer ThyssenKrupp CEO in a SPIEGEL interview. The result could threaten the global economy and cause a bubble even bigger than the one that triggered the subprime crisis in the US.
SPIEGEL: Mr. Schulz, while the world economy is ailing, steel prices are climbing to new highs. How does that fit together?
Ekkehard Schulz: It's easy: As a steel producer, we depend on massive quantities of mineral resources. We need coking coal, nickel and, most importantly, iron ore. In recent months, prices of the latter resource, in particular, have downright exploded. We can't do anything to compensate for that fact.
SPIEGEL: We're familiar with that line. It's always someone else's fault.
Schulz: In this case, it's correct. There are only a few large iron producers in the world. They are located in Brazil and Australia. And we are completely at the mercy of the prices they set. more