Vale SA, the world’s biggest iron-ore producer, will seek a smaller cut in contract prices from customers than the 33 percent reduction negotiated today by Rio Tinto Group, mining analysts said.
Vale will seek to lower benchmark prices for iron ore supplied this year to global steel mills by 20 percent to 27.5 percent, Gilberto Cardoso, a Rio de Janeiro-based analyst with Banif Securities, said today in a telephone interview.
Earlier today, Rio Tinto agreed to a 33 percent cut in contract prices for the steelmaking raw material with Japanese steelmakers including Nippon Steel Corp., the first decline in seven years as the global recession slashes demand.
Today’s agreement “will serve as a parameter for Vale to negotiate”, Luciana Leocadio, analyst with Ativa Corretora, said by telephone from Rio de Janeiro.
Vale press spokesman Fernando Thompson declined to comment on iron-ore pricing in an e-mail today.
Last year, Vale gained a 65 percent price increase while Rio Tinto and BHP Billiton Ltd. which settled prices later in the year after demand surged, won increases of 85 percent or more.
Source: Bloomberg
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