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| Iron ore price negotiations - Vale denies reports of 20% rise |
| BY steelguru.com, Writer |
| In response to a request from the Brazilian securities regulator Comissão de Valores Mobiliários Companhia Vale do Rio Doce informs that it does not confirm rumors circulating in the market today regarding a price adjustment of 20% for iron ore. It said that “Vale hereby reinforces that as part of its ongoing business, it is constantly dialoguing with clients aiming to reach satisfactory mutual conditions for commercial contracts, involving among other factors, quality, volumes and time for delivery.” It added that “Vale also reinforces its commitment with its customers, investing a substantial amount of resources in increasing production capacity. Currently, we are developing projects to add new capacity of high quality iron ore to meet our client needs, to reach a production capacity of 450 million metric tonne per year by the end of 2012, which will require substantial investment in new mines and the enlargement of our railroad and port infrastructure.” Steel Business Briefing reported that Vale has issued Chinese steel customers with a contract addendum, raising the 2008 benchmark iron ore prices it originally negotiated in February by around 20%. The report said that the price of Vale’s South System iron ore fines has now increased 86.4% on the 2007 contract price, while the price of Carajás fines is up 92.4%. This compares to increases of 71% and 65% respectively that Vale agreed with Chinese mills back in February. |