Reuters reported that Brazilian mining giant Vale has already set contract iron ore prices for the third quarter of 2010 and offered them to its customers.

Mr Jose Carlos Martins ferrous metals director at Vale said that they represented an average of prices from March to May.

Mr Martins said that customers were free to choose which price index they preferred to use, so long as they accepted the more flexible quarterly pricing system.

He said he expected ore shipments to China to stand at around 140 million tonnes this year, the same as 2009, and that the company was now working on restoring output to its full capacity of 300 million tonnes.

Vale has already replaced the old annual benchmark system with an index based mechanism in which prices are changed every three months.

(Sourced from www.reuters.com)