looks like Japanese have broken ranks too and dealt
Vale Wins 19% Japan Iron-Ore Rise; Pellet Price Falls (Update1)
May 17 (Bloomberg) -- Cia. Vale do Rio Doce, the world's largest iron-ore producer, said Japanese steelmakers agreed to a 19 percent increase in the price of iron-ore for 2006. The price of Vale blast-furnace ore pellets to Japan will fall 3 percent.
The price increases are for iron-ore and pellets from Rio de Janeiro-based Vale's Carajas, which ships through the port of Sao Luis, Brazil, and Southern, which ships through the port of Tubarao, Brazil, Vale said in an e-mail statement.
Vale, whose Brazilian mines are running at full capacity, had asked for a 24 percent increase to finance expansion. The company plans to spend $2.1 billion this year to expand iron-ore output, the statement said. The price agreed to in Japan is the same agreed to by TheyssenKrupp AG, Germany's largest steelmaker, on May 16.
Before the agreement with Japanese steelmakers was announced, Qi Xiangdong, the vice chairman of China's Iron & Steel Association, said his country's steelmakers would not accept the ThyssenKrupp agreement as a benchmark for world iron- ore prices. World prices would be set by Shanghai-based Baosteel Group Corp., Tokyo-based Nippon Steel Corp. and Luxembourg-based Arcelor SA, he said.
Chinese steelmakers are the world's largest consumers of iron-ore, the main ingredient in steel.
The major steelmakers are in talks with Vale, Rio Tinto Ltd. and BHP Billiton Plc., the three largest iron-ore producers. Last year, steelmakers agreed to a 72 percent price increase for iron-ore sold under long-term contract. Spot, or non-contract prices are higher.
The Vale agreement announced today is with ``the major Japanese steelmakers,'' Vale's press office said, while declining to name the specific companies.
The agreement with Japan and ThyssenKrupp are for prices FOB or ``free on board,'' meaning they include delivery costs from the mines to port where they are loaded on ships for export.