Temporary discount CVRD steel ore sales to China

According to Shanghai Securities News reported that delays in the international iron ore negotiations outstanding, together with the market downturn, iron ore pricing system has a more complicated situation. 21, one of the three major mining company Vale do Rio Doce issued a statement the company said in 2009 iron ore contract discount will be taken to the provisional implementation of such a flexible manner, that is, 80% of the price paid in cash and another 20% of the purchase price will be in 2009 after the end of the year to pay the price negotiations.

CVRD said the bond will be realized in 2008 as a interim charge of the yardstick costs, in 2009 after the end of the yardstick charge dialogues will be supported on the effects of their adjustment. As is customary, CVRD and Asian hard metal costs will be the yardstick charge dialogues in the April 1 each year, but have not observed any of the prevailing negotiations. The past year in the new charge is not deliver and demand boundaries are pre-released last year reconciled a long ADPL costs, but the market downward spiral this year, mine was to make concessions.

CVRD Zhu, president of China said it would abandon the long-HS price first right to negotiate the price. “We are the engine, and now we intend to back the.” Zhu said, the company will increase this year to 25% reduction, while increasing sales efforts in China. He believes that CVRD’s products more competitive in China, as more large-scale mining companies a cost advantage is expected to cost about 100 million tons of iron ore supply will be more competitive manufacturers in lieu of.

It is appreciated that the first quarter of CVRD’s metal ore to Europe fallen by nearly half, while metal ore trade items to China expanded by almost 40%, because of its iron alloy mills and China marked several little and medium-long agreement for the provide of ore Association.

In detail, it is furthermore the CVRD excavation business in Australia to pursue the trading strategy. According to acquainted causes, the present excavation business in Australia to China Steel’s sales scheme was “long-term affirmations on iron alloy, 80% of improvement to non-agreement is 60% of families, non-agreement is the culmination of the client, or a new affirmation to signal the affirmation iron alloy mills, excavation businesses are at the identical time location market sales, a lone suggested, nearly tender, bigger than the rudimentary is to get a cargo. ”

Association in agreement with the 2008 charges of the year long, Australia 63.5% of the dust degree ore FOB charges for 91.6 U.S. dollars / ton, 76 U.S. dollars for Brazilian ore / ton. Tang Qi, general supervisor of Wuhan Iron and Steel Group, Lin said that the end of last year furthermore if the Chinese iron alloy mills in 2008 in agreement with the Association of the long procurement of metal ore charges will not survive.