Tom Albanese, CEO of giant Australian iron ore miner Rio Tinto, has stated that the quarterly pricing system applied in the global iron ore market could be rescinded since current iron ore prices in the spot market are lower than the main iron ore miners' contract prices for the third quarter.
At China's main ports, spot prices for imported iron ore (63.5 percent grade) are generally at the level of RMB 915/mt ($135/mt), excluding 17 percent VAT, lower than the Q3 contract price of $147/mt set by the three iron ore giants, i.e. Rio Tinto, BHP Billiton and Vale.
So far, few Chinese mills have signed quarterly contracts with the principal miners. Given the lower levels of spot prices, the Chinese mills are expected to turn to the spot market for supplies of iron ore.