Vale SA, the world’s largest iron- ore producer, is “certain” to reach a price accord for the steelmaking ingredient this year with Chinese steel mills, Ferrous Minerals Director Jose Carlos Martins said.
Vale expects to reach a “mutually interesting solution” with its Chinese iron-ore buyers in 2010, after “overcoming” 2009’s stalemate, Martins told reporters today in Rio de Janeiro. Last year, China’s big steelmakers discarded traditional benchmark pricing after failing to reach accords with mining companies on contract sales.
Vale sold a record 110 million metric tons of the raw material to Chinese buyers in the first nine months of 2009, while European sales fell because of the global economic crisis, Martins said. Vale intends to keep this year’s sales to China little changed from 2009 levels as demand recovery in western and Asian markets may tighten supplies, he said.
“This year’s going to be different,” Martins said. “Vale’s relations with its Chinese clients are very good. We have more than 120 clients spread over all Chinese provinces.”
Today, demand for global iron ore has rebound to pre-crisis levels or possibly higher, Martins said. Seaborne trade in iron ore may reach 900 million tons this year, up from 850 million tons in 2008, he said.
Source: Bloomberg
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