Contrary to other commodity prices, it seems iron ore remains a hot commodity, and BHP Billiton (NYSE:BHP) and Rio Tinto (NYSE:RTP) are going to raise prices again for the main ingredient to make steel, this time by close to 23 percent from the last quarter.
This price increase was made in relationship to Japanese steelmakers, although will apply to other buyers as well.
It is thought that Vale (NYSE:VALE) will follow in the footsteps of their peers and raise iron ore prices as well.
Prices after the latest increase per ton for iron ore will be at about $147 a ton, far above the 2009 fiscal prices, which were 140 percent less than today's prices.
Steelmakers are poised to add those extra costs onto their products, essentially passing the higher prices to consumers.
This does make one wonder if this is sustainable, as other commodity demand has fallen, and if demand has fallen for other metals used to make products, it's hard to see how iron ore and steel are able to stand on their own, as it points to demand drying up and people hanging onto their money.
I don't think the general public has processed what they're up against in the emerging or ongoing economic challenges in Europe, China and the U.S., and this could backfire on BHP, Rio and Vale if demand starts to implode on them and they're stuck with high prices with nowhere to go but down.
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