Brazilian iron ore giant Vale has announced its agreement to an 86.67 percent hike in prices for direct-reduction iron ore pellets delivered to certain Middle Eastern and North African steel producers, effective from April 1, 2008. The companies in question include Saudi Arabia's Saudi Basic Industries, Qatari steel producer Qatar Steel, Egypt's El Ezz Steel Rebars and Libyan Iron and Steel.
Rio De Janerio-based Vale has stated that its FOB price for this refined form of iron ore has increased up to $2.4222 per iron unit for shipment from the Brazilian port of Tubarao.
The pellet price hike in question is similar to the price increase agreed last week by Vale and BHP Billiton's joint venture Samarco Mineracao for direct-reduction pellet supply to the Middle East.
Due to the high customer demand from the Middle East, pellet prices have skyrocketed to record levels.