More Iron Ore Contracts By CVRD

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By Rudi Filapek-Vandyck

Brazil’s Companhia Vale do Rio Doce (CVRD) is signing up customers one after the other agreeing to the much publicised 19% price increase for iron ore fines for 2006 contracts. The latest to agree to the price increase is South Korean steel manufacturer Pohang Steel Corporation, better known as Posco.

It would only seem logical an announcement about the Chinese succumbing to a 19% price increase should follow soon.

CVRD previously reached contract agreements with German steelmaker ThyssenKrupp, Italian steelmaker ILVA SpA and Japanese steelmakers. The agreements are all similar in that they involve a 19% price increase for iron ore fines and a 3% price decrease for iron ore pellets.

Chinese steelmakers, which are led in 2006 price talks by Shanghai Baoshan Iron & Steel Co have so far resisted efforts to raise prices this year by the three major producers of iron ore, CVRD, BHP Billiton (BHP) and Rio Tinto (RIO).

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