2009-12-17
Brazilian mining giant Vale will reduce the delivery price of iron ore sold to China next year, the China Daily newspaper reported on Wednesday.

The report, citing an unnamed official with a Chinese steel company, said Vale has already signed long-term freight price agreements with a number of local mills, offering discounts of 20-30 percent.

Vale's chief executive, Roger Agnelli, told reporters on Monday that the company had not yet begun discussing next year's contract iron ore prices with Chinese steel mills.

The company has been making efforts to improve its market share in China, the world's biggest iron ore consumer, especially in light of a controversial production joint venture between its two major rivals, BHP Billiton and Rio Tinto of Australia.

In order to help it compete, the company is planning to set up a regional distribution centre in China, and will cut costs further by building 16 dedicated ore carriers, the China Daily said.

It is also in talks to establish long-term supply contracts with some of China's smaller steel mills, according to a report in China's 21st Century Business Herald.

The China Iron and Steel Association has already sent a delegation to Brazil to discuss joint action to oppose the BHP-Rio merger, the Australian Financial Review said this week.