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CVRD Announces Iron Ore Price Settlement With Japanese Steel Mills
Companhia Vale do Rio Doce S.A. (CVRD) of Brazil announced February 22 it has reached agreement with Japanese blast furnace steel mills including Nippon Steel Corp on the 2005 iron ore prices to the following effect:

As an outcome of the price talks, iron ore price for Carajas (SFCJ) and Southern System (SSF) fines, fob Ponta da Madeira and Tubarao, respectively, increased by 71.5% over the 2004 levels.

The magnitude of the price increase for 2005 reflects an unprecedented situation marked by the disequilibria in the global metals and seaborne freight markets leading to substantial price increases on the products and services during the last couple of years.

CVRD reinforces its long-term commitment with customers, through investment of a significant amount of resources in the production and logistics of iron ore. For 2005, CVRD allocated a US$1.7 billion capital expenditure budget for investments in ferrous minerals. Currently the Company is developing six projects for iron ore production capacity expansion, which will come on stream between 2005 and 2007.

The iron ore price settlement with a large and traditional customer such as Nippon Steel with which CVRD has enjoyed a 50-year commercial relationship proves the weight of the long-term view involved in these negotiations.
last modified : Tue 01 Mar, 2005 [10:28]
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