Brazilian miner Vale on Wednesday said it slashed 2009 benchmark iron ore prices by as much as 48.3 percent to Japanese and South Korean steelmakers as part of annual benchmark price talks.
The company stated in a securities filing it will cut fine ore prices by 28.2 percent from 2008 levels and agreed to reduce pellet prices by 48.3 percent.
Vale, the world's biggest miner of iron ore, said the accord includes Japan's Nippon Steel Corp., South Korea's POSCO and three other Japanese steelmakers.
The move sets the stage for Vale to negotiate this year's benchmark price with China, the world's largest importer of iron ore which is demanding a cut of 40 to 50 percent.
A Vale spokesman declined to comment on the move.
Miners until last year had the upper hand in price negotiations as strong demand let them command hefty increases, the financial crisis turned the tables, giving Asian steelmakers a stronger position to demand steep cuts.
Last month Australia's Rio Tinto, the second largest producer, agreed to reduce fine ore prices by 33 percent from 2008 prices to Japanese buyers and cut higher quality lump ore prices by 45 percent.
Vale this year waited for other producers to announce the new prices they had negotiated before committing to a rate after Australian miners clinched better deals in 2008 based on lower shipping costs.
Source: Reuters
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