News Room - Steel Industry

Posted on 15 Mar 2010

Vale proposes quarterly pricing to Japan mills

Vale, the world's biggest iron ore producer, has joined BHP Billiton in a push for quarterly pricing of iron ore, a source with knowledge of the talks told Reuters.

 

Vale has proposed to all of Japan's big mills a shift to a quarterly pricing scheme from the current annual system, the source said.

 

The Brazilian company has suggested they adjust prices every quarter based on spot prices in China of Indian ore, for example, the source said, adding that Vale has yet to make an official proposal on prices.

 

Japanese mills are resisting the proposed change, the source said.

 

The move comes a week after BHP Billiton agreed a quarterly price with steel mills in Japan, China and Europe for coking coal, the other main input in steel making.

 

The Big Three mills -- Vale, Rio Tinto and BHP Billiton -- and Japanese mills such as Nippon Steel Corp are locked in tense negotiations on the pricing of iron for the year starting in April.

 

Talks with Japan's mills are expected to set the stage for wider negotiations with Chinese mills, which account for 70 percent of the global market.