Mining firm Vale to lift iron ore price by 35%: report

Mining firm Vale will lift iron-ore prices by as much as 35 per cent from July 1st with a view to adjust supply contracts quarterly, Brazilian newspaper O Estado de Sao Paulo reported.

According to the Brazilian newspaper, firm’s iron-ore prices were well below spot prices in China, and the potential increase in prices would help it to recover a big part of that difference during the quarter starting July 1st.

Reports suggest that Vale was asking Chinese steel firms to pay an iron ore price of $160 a tonne in the third quarter, up 23 per cent from the previous quarter.

However, a spokeswoman for Vale declined to comment on the newspaper report suggesting price increases.

Apart from Vale, BHP Billiton and Rio Tinto will also reportedly ask for further price increases for iron ore and coking coal.

Iron ore and coking coal filters into steel, which is used to make goods for every-day use. So, increase in the price of iron ore will push the cost of steel up and drag steelmakers’ profit down.