Rio Tinto cuts iron price by a third

26th May 2009 07:13

Mining giant Rio Tinto has agreed a 33% cut in contract fine iron ore prices with Japan's Nippon Steel Corp for the current shipping year, in a deal likely to set the benchmark for other settlements. Rio said its subsidairy Hamersley Iron had set prices for the contract year commencing 1 April 2009 as follows (US dollars): Pilbara Blend Fines and Yandicoogina Fines at at 97c per dry metric tonne unit against $1.47 last year, while Pilbara Blend Lump has been set at $1.12 against $2.017. "Rio Tinto is pleased to reach this agreement today with Nippon Steel Corporation, Japan's leading steelmaker," Rio Tinto Iron Ore chief executive, Sam Walsh said."We believe this settlement is a realistic outcome for both parties - one that reflects the global market for iron ore and the current challenging market conditions facing our customers," he added. Prior to this latest deal, iron ore prices had risen by over 500% in six years of consecutive rises as insatiable demand from China soaked up the world's output of iron and pother base metals.