Iron ore price hike of 80% in two instalments in Brazil
Brazilian mining group Vale is seeking to increase its iron ore prices for domestic buyers by 40% in March and another 40% in April, according to normally reliable sources in the domestic iron and steel sector.
Steel Business Briefing is told that an 80% price hike will be implemented in two instalments to soften the impact on steel production costs, at least for the Brazilian domestic market. Questioned by SBB, Vale declined to comment on the issue.
The domestic market moves reflect recent comments by Vale executives that global 2010 contract prices should reflect spot prices. According to its executive director for ferrous minerals, José Carlos Martins, “the market will have to understand current scenario and our contract prices will have to move closer to spot values”.
As previously reported by SBB, Vale’s change of stance is an admission that the days of the fixed annual benchmark fob price are going. This moves the Brazilian miner closer to BHP Billiton which is trying to shift more of its business on to spot pricing. |
