Top iron ore producer, steel maker to raise price

Analysis

The Brazilian miner Vale, world’s largest iron ore producer, struck a deal Thursday with the Luxemburg-based Arcelor Mittal, world’s largest steel maker to raise the iron ore price in 2008.

Under the deal, the price of the iron ore produced in the Southern System (Minas Gerais state) increased 65% in relation to 2007, Vale said. Meanwhile, Arcelor Mittal agreed to pay a higher price of $1.4060 per dry metric ton Fe unit for the iron ore produced in the Carajas mining complex, northern Brazil. “The magnitude of the price increase for 2008 reflects the continuity of very tight conditions still prevailing in the global iron ore market,” the Brazilian giant Vale said. The agreement with partners like Arcelor Mittal represented its “commitment to the benchmark pricing system, respecting the weight of the long-term relationship and trust involved in these negotiations,” Vale added. The miner also said that its iron ore output rose at an average annual rate of 14.1% during 2001-2007, and that it plans to expand its annual production capacity to 450 million metric tons in 2012. (people.com.cn)

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