Brazilian mining giant Vale SA is expected to raise quarterly iron ore contract prices by 8.8% to USD 149.20 per tonne in January.

A Chinese steel mill source confirmed to Reuters that Vale had decided first quarter prices by calculating the average Platts' daily CFR price for North China from September 1 to November 30.

Vale switched to quarterly pricing in April 2009, abandoning a decades old annual benchmark system in which prices are settled once a year following an increasingly fraught period of negotiations by buyers and sellers.

According to the Chinese source, contracts with Vale stipulated that prices for each quarter were set according to an average price for those days within the period of three consecutive calendar months beginning on the first day of the fourth calendar month prior to the start of the relevant quarter.

(Sourced from Reuters)