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Excerpt from our Wall Street Breakfast, a one-page summary of this morning's key market-moving and stock-moving stories:

Steelmakers, Led By China Firms, Seek Lower Iron-Ore Price Increase [Wall Street Journal]

Summary: Negotiations for iron-ore prices in 2007 continue between steel and iron-ore companies, with an increase now seen coming in at 5%-10%. At least for now, it looks as if steelmakers will not have to face as high of a price rise as in the last three years: +19% in '04, +71.5% in '05 and +19% in '06. Iron-ore producers claim higher-than-expected demand is keeping the market tight and iron-ore price increases haven't equaled the price rise seen in other metals. An industry analyst says pricing power remains with the world's three largest producers: Cia. Vale do Rio Doce, Rio Tinto PLC and BHP Billiton. One argument is steelmakers can absorb higher costs due to better cost containment of shipping and coal. China is playing a larger role in this year's talks out of necessity since it consumes approx. one-third of the world's steel output. Shares of Mittal Steel and US Steel have risen about 50% this year, outpacing the 20%-25% gains by Big-3 iron-ore. BHP-CVRD-RIO-v-Mittal-USSteel-1yr-chart-12-01-06
Related links: Commentary: Rio Tinto Ready to Exploit Better-than-Expected Iron-ore PricesMetal and Mining ETF: A Safer Way to Play SteelNew Van Eck Global Steel ETFA Steel Industry Primer.
Potentially impacted stocks and ETFs: Mittal Steel (NYSE:MT), United States Steel (NYSE:X), Rio Tinto (RTP) -- 1 ADR = 4 ordinary shares, Companhia Vale do Rio Doce (NYSE:RIO), BHP Billiton (NYSE:BHP) -- 1 ADR = 2 ordinary shares • ETFs: Market Vectors - Steel (NYSEARCA:SLX), SPDR Metals & Mining (NYSEARCA:XME)

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Source: Will Another Iron-ore Price Hike Stop Surging Steel Stocks?