BEIJING, Mar. 26 -- Global mining giants Rio Tinto and Vale have thrown their weight behind calls for more flexible iron ore pricing.
Sam Walsh, head of London-based Rio's iron ore business, was quoted by Bloomberg News as saying that the company may settle prices of the steelmaking ingredient on a quarterly basis.
Talks are proceeding with Rio's customers Walsh said on Wednesday in Singapore, where he's attending the Asia Mining Congress.
BHP Billiton Ltd and Vale SA are unlikely to have reached a settlement yet, he said.
Brazil's Vale, the world's biggest iron ore supplier, is seeking shorter sales contracts that may boost prices 90 percent for the April quarter, Credit Suisse Group AG said on Tuesday.
Producers in Australia will make $20 billion more a year by selling products at cash levels rather than on annual contracts, Goldman Sachs JBWere Pty said on March 1.
"Our contracts require us to establish a price each year," said Walsh.
"Whether that price is established on an annual basis or whether it's established on a quarterly basis, that is up to the negotiation."
Shares of Rio rose 2 percent to close at A$77.20 on the Australian stock exchange on Wednesday.
"Vale has officially informed that it recently has implemented a new marketing policy, involving, among other things, a more flexible approach in relation to prices of iron ore," the Brazilian company said in a statement quoted by Reuters.
Until this year Vale had been the staunchest of the top three iron ore miners in backing an annual benchmark price, but shifted away from this stance as the spot market value for the material doubled since early September.
Vale's statement did not mention prices it was seeking for iron ore this year, but Brazilian business daily Valor Economico reported the new pricing index would take effect as of April 1 with Carajas sinter feed fines ore selling at $122.20 per ton, compared with the $57 per ton price in place since last year.
The paper said prices would be linked to Platts IODEX iron ore index.
Prices are traditionally set for the 12 months starting April 1. Rio Tinto last year agreed to sell benchmark products to Japanese steelmakers at a 33 percent discount, or $61 a metric ton, excluding freight.
Chinese steelmakers last year failed to reach an agreement with Rio, deeming a 33 percent price cut offered as insufficient.
BHP Billiton, the world's third-largest supplier of iron ore, raised the amount of products it sold on shorter-term pricing last year.
BHP Billiton and steel mills in China and Japan declined to comment, according to Reuters.
Nippon Steel Corp, the world's second-biggest steelmaker, referred to recent comments by company president Shoji Muneoka, speaking in his capacity as chairman of the Japan Iron and Steel Federation.
"Miners are making a lot of noise to try and give themselves an advantage in price talks, but you should remember it's only steelmills that buy their product - iron ore," he said.