Iron ore suppliers mull monthly pricing plans
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"We wish to improve our relationship with the stock good price market," Martins said. "We didn't think about this mode, but if it can give us better liquidity and avoid market manipulation, we will certainly apply this mode."
But this mode is jeopardizing Chinese steel business. Recently, Chinese steel businesses learned that the iron ore price quote for the 3rd quarter of this year would be a 23 percent increase to US$150 per ton. This price is on par with the current spot price.
Though Chinese steelmakers don't wish to accept a pricing plan shorter than the quarterly plan, they can't do anything except invest in more mining companies overseas.
The shrinking home and EU market demand has brought down the spot price of iron ore to US$150 from US$180 per ton. "The iron ore price fell slower than that of steel products," said Tang Jing, analyst of Umetal.com, in explaining the prolonged loss of Chinese steelmakers.
When asked about the rumor that the iron ore spot price will fall in the fourth quarter, Roger Agnelli, president and CEO of Vale, said, "We don't worry about China's short-term business adjustment because the trend of China's economy is ever-increasing."
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