Paris: ArcelorMittal, the biggest steelmaker in the world, and Brazilian mining group Vale have agreed a huge cut in the price of iron ore for a new supply contract, Vale said on Monday.
In a statement in Rio de Janeiro, Vale provided figures showing that the negotiated price of iron ore had fallen by 28.2-48.3%, depending on the category, compared with 2008.
A spokesman for ArcelorMittal told AFP that the agreement was “of the greatest importance” for the company because Vale was a big supplier.
Steel groups negotiate at about this time of year each year the prices which they will pay for iron ore, the main raw material for the production of steel.
The price of steel boomed in the last few years but the global economic crisis has reduced demand sharply and makers have pushed for big cuts in the prices they pay for ore.
The British-Australian mining group Rio Tinto earlier agreed cuts of 33-44 % in the price of the ore it sells to Nippon Steel and to its main customers in South Korea and Taiwan.