SHANGHAI: Rio Tinto Ltd , the world's No. 2 iron ore miner , will drop its prices by up to 3 percent for Chinese steel mills for the third quarter, sources with knowledge of the contract details told Reuters.
The modest price cut was in line with a decline in spot prices of the steelmaking raw material. Global miners have been using spot values as the basis for setting contract rates since the industry moved to a more flexible quarterly system after scrapping a decades-old annual pricing scheme.
Rio has asked some Chinese steel mills to pay $2.7234 per dry metric tonne unit (dmtu) for iron ore fines and $3.0109 per dmtu for lump ore for the July-September period, sources told Reuters on Thursday.
Those compare with Rio's second-quarter price of $2.7638 for fines and $3.1063 for lumps, the sources said.
The price puts Rio's 62-percent Pilbara Blend fines at $168.85 per tonne, compared with $171.35 in the second quarter, in line with initial industry estimates.
An official who buys iron ore for a mid-sized steel mill in northern China said the company had received the pricing details from Rio Tinto on Wednesday.
Several more steel mills in eastern China had received the notice with the same pricing details, another market source said.
The modest price cut was in line with a decline in spot prices of the steelmaking raw material. Global miners have been using spot values as the basis for setting contract rates since the industry moved to a more flexible quarterly system after scrapping a decades-old annual pricing scheme.
Rio has asked some Chinese steel mills to pay $2.7234 per dry metric tonne unit (dmtu) for iron ore fines and $3.0109 per dmtu for lump ore for the July-September period, sources told Reuters on Thursday.
Those compare with Rio's second-quarter price of $2.7638 for fines and $3.1063 for lumps, the sources said.
The price puts Rio's 62-percent Pilbara Blend fines at $168.85 per tonne, compared with $171.35 in the second quarter, in line with initial industry estimates.
An official who buys iron ore for a mid-sized steel mill in northern China said the company had received the pricing details from Rio Tinto on Wednesday.
Several more steel mills in eastern China had received the notice with the same pricing details, another market source said.
