Vale, BHP Billiton and Rio Tinto are looking to raise iron ore prices by at least 80% each, with Vale winning a 90% increase on the 50% existing commission already brought in from iron ore sales.
Sumitomo Metal Industries, Japan’s third-biggest steelmaker, will pay Vale $100 to $110 a metric ton for the quarter starting 1 April.
As new annual contracts come into play, BHP Billiton said it will still sell the majority of its production to Asian steel mills on shorter-term contracts.
Rio Tinto also plans to ditch annual prices this year but could be pushed into accelerating its plans.
Steelmakers in Europe and China are upset with the move to shorter-term pricing as they launched another round of price hikes to recover soaring raw material costs.
Vale and BHP Billiton and Rio Tinto, which control a third of the iron ore trade, have been pushing to change the rigid benchmark system into a derivative-driven system similar to other global commodities such as oil.