Steel trade group Eurofer has expressed its outrage over increased iron ore prices.

It said an announcement by the iron ore industry to increase iron ore prices by 80 to 90% compared to today’s price levels for fines lump and pellets would have a huge impact on economic recovery.

It added that European governments should be aware of the implications for the wider economy if the increases become reality. It said the price hikes were coming from companies which, even in the worst crisis in the world economy in the last 80 years, have EBIT margins of up to 50%/t.

It observed that increases of this magnitude could have a significant impact on steel prices and on the whole manufacturing and construction value chain and ultimately on the European consumer. This will reduce demand for many price-sensitive products and therefore slow economic recovery or even push economies back into recession.

In a statement it said: “The steel industry is increasingly concerned at the degree of concentration in the iron ore industry. It is striking in this respect that there is little variation in the level of price increases being talked about by the large producers which dominate the iron ore industry. The European steel industry has already indicated to the European competition authorities our concerns at the excessive pricing power now held by iron ore producers.”