Vale claims all customers agreed to quarterly pricing

13:38, May 06, 2010      

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Vale, the world's largest producer of iron ore, posted its quarterly financial statements on May 5, 2010, claiming it has reached agreement with all clients in the world to adopt long-term or temporary quarterly pricing systems.

Vale said with the rapid growth in global iron ore demand, the decades-old benchmark pricing system can not adapt to dynamic changes in supply and demand, nor serve the interests of the steel and mining business. They contend that to let the market determine the price provides continual and important information for market participants and can promote the balance of the market.

Vale broke a 40-year tradition of negotiating annual contracts in March when it agreed on new quarterly prices with Japanese buyers. Melbourne-based competitor BHP Billiton, the world's largest miner, has also switched to quarterly pricing, while London-based Rio Tinto Group is in talks to do the same. Miners are seeking to capitalize on spot prices, which have more than doubled in the past year. The companies control about three-quarters of the iron-ore export market.

By People's Daily Online


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