Brazil’s Vale do Rio Doce wants to increase price of iron ore by 24 percent

31 March 2006

Sao Paulo, Brazil, 31 Mar – Brazilian mining company Companhia Vale do Rio Doce wants to increase the price of a ton of iron ore by 24, the world’s largest producer of the raw material said Thursday.

The proposed increase was presented in a round of negotiations between the Brazilian company and representatives of Chinese, Japanese and European steelworks, which are expected to make a counterproposal in the next few days.

The justification for the price increase was the increased value of around 24 percent of the Brazilian real against the dollar over the last 12 months.

Sector analysts believe that despite the projected increase in demand for iron ore this year, the foreign steelworks will try to lower Vale do Rio Doce’s proposal.

Last week, the director of Chinese company Guangzhou Iron and Steel, Ma Jianwu, said that the company would accept a 10 percent increase in the price of iron ore.

The negotiations between CVRD and foreign steelworks are due to be concluded by the end of April.

Last year, China was CVRD’s main foreign customer, as it imported 56.5 million tons of iron ore, representing 22.4 percent of the company’s total sales.

Last year, profit at CVRD increased by 61.7 percent to 4.09 billion euros against 2004, which was the company’s biggest ever profit. (macauhub)