June 2009 | Steel Raw Materials
Vale reached first contract agreement: Iron Ore Highlights
Spot market prices are stable
Brazil’s Vale this week settled contracts for iron ore fines and pellet with a number of Japanese steel mills, including Nippon Steel and Sumitomo Metal Industries, and South Korea’s Posco. As expected, Vale was able to win to acceptance for a smaller reduction in iron ore fines contract prices than had already been agreed between Rio Tinto and certain Asian steelmakers for 2009 iron ore deliveries: Vale’s price for fines will come down by 28.2%, less than the almost 33% drop conceded by Rio Tinto. The difference in the settlements agreed represents a roll back of at least part of the premium obtained by Australian miners last year reflecting the relative cheapness of shipping iron ore to Asia from Australia.
...putting Chinese mills under greater pressure
A larger reduction was agreed for deliveries of lump iron ore – about 44%, similar to the...
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