October 08, 2008

Iron ore price negotiations – Baosteel accepts 65% increase from Vale

World’s largest iron ore producer Vale has concluded the iron ore fines price negotiations for 2008 with Chinese steelmaker Baosteel, which represents all the Chinese steelmakers.

As an outcome of these negotiations, the iron ore prices for Southern System fines SSF FOB Tubarão increased by 65% relatively to 2007. At the same time, due to its recognized superior quality, it was agreed that the price for Carajás iron ore fines SFCJ will have a premium of USD 0.0619 per dry metric ton Fe unit over the 2008 price for SSF.

Therefore, the new reference prices per dry metric ton Fe unit for 2008 are USD 1.1898 for SSF and USD 1.2517 for SFCJ.

The magnitude of the price increase for 2008 reflects the continuity of very tight conditions still prevailing in the global iron ore market.