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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (37442)	5/21/2009 4:25:50 PM
From: LoneClone	Read Replies (1) \| Respond to of 193614

Vale's iron ore 09 price cut seen smaller-analysts Thu May 21, 2009 3:39pm EDT reuters.com By Denise Luna RIO DE JANEIRO, May 21 (Reuters) - Weaker demand for iron ore should force Brazilian mining giant Vale to concede price cuts to Asian clients in annual negotiations, but any cut should be less than Australian rivals face. Vale (VALE5.SA)(VALE.N) has decided to wait for rivals BHP (BHP.AX) and Rio Tinto (RIO.L) to set new prices before committing to a new rate with its clients. Last year it lost out after concluding its price talks first. Australian firms clinched better deals shortly after. The company obtained increases of up to 71 percent with its clients while Australian firms managed to nearly double their rates, which rose by 96 percent. Few details have emerged about the talks, but Asian clients have said they are seeking aggressive price cuts amid cooling demand after several years of hikes. "I think it's still going to be complicated. It's at the stage where the miner is saying one thing and the steelmaker saying another. They are negotiating through the press," said Pedro Galdi, an analyst at the Sao Paulo-based SLW brokerage. Galdi said the recovery in China's demand for iron ore in the first quarter, when Brazilian imports even exceeded last year's, would strengthen Vale's arm in negotiations. Chinese steel executives rejected talk on Thursday that their Japanese counterparts were negotiating for a 30-35 percent cut, saying prices would need to be slashed more than that to ensure profits for steel companies. One source familiar with the Japanese price talks had said Nippon Steel Corp (5401.T) had negotiated a cut of 30-35 percent with iron ore miners and that a deal would come by the end of June at the latest. [ID:nPEK18521] Antonio Emilio Ruiz, a mining sector analyst at state-controlled Banco do Brasil's brokerage BB Investimentos, said Vale could impose a smaller reduction in the region of 25 percent. "The miners still wield a lot of power. They still have around 70 percent of the product that steelmakers want and still have a lot of bargaining power," he said. "There's a consensus in the market that since the Australians obtained more last year, there should be a bigger cut (for them) this year," he said. Cristiane Viana, analyst at the Agora brokerage, based in Rio de Janeiro, was working with an estimate of a 28.1 percent drop in Vale's iron ore price and said she too expected an announcement from Vale would only come after Australian miners' prices were set. (Writing by Peter Murphy; Editing by David Gregorio)