As the leadership of GM announced, Opel needs the assistance of European governments in the amount of about 3.3 billion euros, as well as a new investor for its survival. German automakers want to become an independent European joint stock company in which GM’s shares will be minimal. German Chancellor Angela Merkel has pledged to provide guarantees for the new investor. According to the head of GM Fritz Henderson, business GM Europe, 80% consisting of Opel, thanks to the introduction of eko premium is doing better than expected. Liquidation of GM in the European unit is likely to last until the end of the year.

Meanwhile GM’s hopes for the new investor in Europe are strengthening. «I am very encouraged», – said the head of the council of general productiveness of Opel Klaus Franz to the newspaper Handelsblatt, after the auto giant described the success in finding investors. As Mr. Henderson said during the teleconference, he had already talked with more than half a dozen applicants for the German automakers. Among the potential buyers are financial investors, and some auto concerns. According to Fritz Henderson, now they have the financial statements of the company. Commerzbank, which has attracted German automakers to seek investors, recently posted the first part of the documents to potential buyers to increase their interest.

Recently, an Italian newspaper reported about the interest in Opel by the Italian auto company Fiat. The head of the supervisory board of Fiat Luca Cordero, however, refuted this information. As the head of GM said, he believes that one of the major challenges is the restoration of the competitiveness of the American concern: «If we have to do this through the bankruptcy, we will do it». The U.S. government is obliged to the automaker to settle billions of dollars of claims by creditors and the union UAW until the end of May. «The clock is ticking», – Mr. Henderson is forced to recognize. Detroit auto concern has already received 13.4 billion dollars from the state, without which it would not survive. According to the edition of Detroit News, the U.S. government is going to approve an additional 5 billion USD for the short-term help to GM this week. Its rival Chrysler can get support from the state in the amount 500 million dollars.

At the same time, experts point out that this union of Rio Tinto and BHP Billiton will be good for their Brazilian rival Vale, as it will strengthen the position of suppliers of iron ore in negotiations with Chinese customers.

In addition, the number of companies participating in the annual price negotiations with steel workers will decline, and it will just happen at the same time when China will be fighting for a greater price declines than the one agreed to by the steel companies of Japan and South Korea.

Upon deciding to merge its iron ore business with BHP Billition, Rio Tinto has already abandoned the sale of the shares to Chinese metallurgical company Chinalco. The cost of the transaction was to amount to 19.5 billion U.S. Experts note that if the transaction took place, China could gain access to the Australian iron ore and even would be able to influence the pricing in this market.

“The establishment of a joint venture of BHP Billition and Rio Tinto is profitable for Brazilian Vale, because it will increase the price discipline. Furthermore, as a result of this transaction the total investment of the two companies in the mining of iron ore will decrease. Thus Vale will be able to boost its presence in the market “- believes the independent analyst Michelle Epplbaum.

It is also worth noting that every year, Rio Tinto, BHP Billiton and Vale negotiate the prices of iron ore with customers, and the total price becomes indicative for the entire industry. Such a system, existsting for 40 years, guarantees the stability in the market, but it becomes less effective with increasing volatility in commodity markets. This year, Japanese and South Korean steel companies agreed on 33% drop in prices, but Chinese demand not less than 40% reduction from last year’s prices. China explains these requirements of high volatility in world commodity markets.

Some analysts say, and that the transaction between the two companies will strengthen the position of Australian suppliers in the Chinese market, because they have an advantage over Vale thanks to geographical proximity and, consequently, lower transportation costs. However, the expert brokerage company Agora Christian Viana believes that the best quality of ore can help the Brazilian company to maintain its position in the Chinese market – the only one in the world where growth in consumption is expected. Anyway, one thing is clear: the fact that what is profitable for iron ore industry will eventually benefit all producers of iron ore, including Vale, conclude market participants.