It is said from Roger Agnelli (Vale CEO) Wednesday that Brazil’s Vale, the world’s largest iron ore miner, isn’t in talks with Chinese steel mills on benchmark price of iron ore in 2009, but will continue to sell iron ore to China at prices concluded on interim contract.
Earlier, Rio Tinto reached an agreement with Japanese and Korean steel mills on a 33 percent price cut for iron ore and Vale also agreed on a 28 percent price cut for this year. Chinese steel enterprises rejected the above price cuts.
However, Vale is still respecting the interim price agreement it reached with Chinese steel mills, said Roger Agnelli.
Although steel prices in China dropped sharply in August, steel output is still on the rise. The domestic 77 main steel enterprises recorded an operating rate of 90.9 percent this month, compared with 87 percent in July.
According to the latest data from the China Iron and Steel Association, the country’s mid- and large-sized steel companies produced about 1.67 million tons of crude steel per day in the first ten days of August, refreshing the record again.
An analyst with Umetal noted that prices of imported iron ore reached the peak in early August, followed by a 15 percent fall responding to the drop of steel prices.
China’s major steel plants have recently raised their ex-factory prices for September, which foretells that they are still optimistic about the steel market in the following two months.
Market analysts note that China’s iron ore demand will continue rising along with the growing steel output.
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