Fri Mar 18, 2011 12:13pm GMT
LONDON, March 18 (Reuters) - Brazil's Vale (VALE5.SA: Quote), the world's top iron ore miner, will not switch to monthly iron ore contract pricing and will stick to quarterly pricing, Vale's global marketing director Pedro Gutemberg said.
"Vale is selling all contracted volumes on quarterly pricing. It is very happy with the quarterly prices and has no intention to switch to monthly prices at this time," Gutemberg told Reuters.
"We believe the three-month period is good enough to avoid major gaps with actual market prices and, on the other hand, smooth volatility of the monthly period."
When the annual benchmark system collapsed in 2010, the top three iron ore miners, Vale, Rio Tinto and BHP Billiton, started to use various pricing mechanisms, based on quarterly indexed-prices.
Top global miner BHP Billiton (BLT.L: Quote) (BHP.AX: Quote) is already selling some iron ore on monthly basis and would like its contract prices to move even closer to the daily market price, a spokesman for the company said.
To price its contracted iron ore, Brazil's Vale uses a quarterly system in which prices are decided by a three-month average of the Platts North China 62 percent FE CFR index IODBZ00-PLT beginning four months before the relevant quarter. (Editing by William Hardy,Reuters)
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