Platts reported that Brazilian miner Vale, the staunchest supporter of annual pricing of iron ore, admitted that an eventual migration to a new pricing system, such as spot or index based is out its hands and that at the end of the day, Vale would have to follow the direction taken by the market
Mr Fidel Blanco MD of iron ore sales of Vale said that “If one decision prevails, we will have to follow. We might regret it, but we will do it.”
He added that “The decision lay in the hands of buyers. Vale is a supporter of the benchmark system. This has been quite harmonic until now, and we are not sure that the steel industry wants a commoditization of iron ore.”
Mr Blanco said that “Pricing based on the spot market had become attractive this year because of the difference with contract rates. Pricing based off indices was dangerous because indices were not representative of the market. They are based on reported sales of Indian iron ore by traders into a couple of Chinese ports. Is this reliable enough? Does it represent the market situation? We don"t think so.”