Brazilian mining giant Vale will hike iron ore prices by around 35 percent to as much as $145 per tonne starting in July, a Brazilian newspaper reported on Sunday, without saying where it got the information.
The O Estado de Sao Paulo newspaper said the hike was part of a new quarterly pricing system being used by Vale , the world's largest iron ore miner, to replace the collapse of the decades-old benchmark system that was based on annual price talks.
Vale representatives did not immediately respond to requests for comment on the size of the price increase.
The newspaper spoke with Vale Ferrous Metals Director Jose Carlos Martins, who confirmed the company would increase prices but would not say by how much.
In the second quarter, our prices were well below the spot market price in China, Martins told the paper.
Under the current formula, our expectation is to recover a large part of that difference in the next quarter, which starts in July, he said, apparently referring to a system of indices that adjust prices based on the spot market.
The exact amount of the price hike will be determined on Tuesday, the newspaper said.
Interfax this month reported Vale was asking Chinese steel mills to pay an iron ore price of $160 per tonne in the third quarter, 23 percent more than in the second quarter, citing an unnamed source at Wuhan Iron & Steel.
(Reporting by Brian Ellsworth, Editing by Sandra Maler)