November 21, 2008

Iron ore price negotiations – Vale defends direct talks

Brazil's Vale the world's biggest iron ore miner told the World Steel Conference that it will stick to direct price negotiations with clients and ruled out the use of trading houses as mediators.

Mr Jose Carlos Martins executive director of Vale's Ferrous Metals said that trading houses were to a big extent responsible for the recent oil price rally that took a barrel to record highs above USD 100. Mr Martins said that "When we negotiate, we do it face to face, with no trading companies involved. There are no mediators. I don't think any floating system will help to balance out demand and supply.”

He said that the current system has been working efficiently for 30 years.

Vale has just hammered out an iron ore price rise of 65% to 71% with its clients for this year.