China Urges Vale to Stop Demand for Higher Ore Prices

By Helen Yuan

Sept. 16 (Bloomberg) -- Cia. Vale do Rio Doce, the world's biggest iron ore producer, should stop trying to raise contract iron ore prices for the second time this year, the China Iron and Steel Association said.

The Brazilian mining company's request is ``unreasonable, going against international negotiation rules,'' the association said in a statement carried on the Custeel.com Web Site.

Vale is seeking to raise prices for Asian mills to match what ArcelorMittal and European steelmakers are paying the company. Steelmakers are rejecting the push as prices for their products fall because of a slowdown in demand.

Asian customers pay 11 percent to 11.5 percent less than European clients, Rio de Janeiro-based Vale said Sept. 9 in a statement. There is no guarantee the talks will be successful, the company said then.

Vale is trying to match higher prices charged by rivals Rio Tinto Group and BHP Billiton Ltd., the second and third-biggest producers. Rio and BHP won a price increase of as much as 97 percent this year, compared with the 71 percent gain of Vale.

Qi Xiangdong, vice chairman of the association, confirmed the authenticity of the statement.

To contact the reporter for this story: Helen Yuan in Shanghai at hyuan@bloomberg.net