Brazil’s Companhia Vale do Rio Doce (CVRD), the world’s largest iron ore producer, concluded the iron ore price negotiations for 2005 with Nippon Steel Corporation (NSC), the largest Japanese steel maker. The deal was announced yesterday.
As an outcome of these negotiations, iron ore prices for Carajás (SFCJ) and Southern System (SSF) fines, FOB Ponta da Madeira and Tubarão, respectively, increased by 71.5% relatively to 2004.
The magnitude of the price increase for 2005 reflects an unprecedented situation characterized by the disequilibria in the global metals and maritime freight markets, which led to substantial prices increases for these products and services during the last couple of years.
CVRD reinforces its long-term commitment with clients, investing a significant amount of resources, despite of rising investment costs, in the production and logistics of iron ore.
For 2005, CVRD capex budget allocated US$ 1.7 billion for investments in ferrous minerals.
Currently, CVRD is developing six projects for iron ore production capacity expansion, which will come on stream between 2005 and 2007.
The iron ore price settlement with a large and traditional customer such as NSC, with whom CVRD has a fifty-year old commercial relationship, is an evidence of the weight of the long-term view involved in these negotiations.
Companhia Vale do Rio Doce