LONDON Brazilian iron ore
miner Vale SA expects iron ore price volatility to ease in
"Prices will not change so much.
We expect only minor movements," Vale chief executive officer
Murilo Ferreira said Thursday in London.
The past year has seen iron ore
prices swing from highs of nearly $150 per tonne in April to
lows below $90 per tonne in early September.
The miner, which was the last of
the big three global iron ore producers to shift to short-term
pricing from the historical annual benchmark system, is now
pricing half its sales on daily index prices.
AMM sister publication
Metal Bulletins 62-percent iron content ore
index stood at $121.64 per tonne c.f.r. China Friday.
Vale used a range of pricing
methods to sell its product to different customers, iron ore
head José Carlos Martins said. It sells 25 percent on
the spot market, and the rest through quarterly or quarterly
"We dont have a preference
for which pricing to use, but we try to avoid different prices,
as it creates volatility," Martins said. "There is a tendency
for (contract) prices to evolve to the daily price."
Differences in pricing do occur
between countries, however, as the Chinese market is more
liquid, while Vales pricing in Japan and South Korea is
still based on one- to three-month pricing, Martins said.
The price outlook remains
"Consumers of iron ore are
tempted to reduce prices and they will remain volatile,"
Martins said, but added that "iron ore prices will stabilize in
the long term."
Vale has no plans to participate
in the over-the-counter iron ore derivatives market to address
volatility, it has said.
Nina Nasman, London,
contributed to this story.
A version of this article was
first published by AMM sister publication Steel First.