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3Q11 Iron-Ore Prices Will Remain Near Record—VALE

http://www.reuters.com/article/2011/05/30/vale-idUSN3025280620110530

›May 30, 2011 5:55pm EDT

RIO DE JANEIRO, May 30 (Reuters) - Brazilian mining giant Vale (VALE) sees iron ore prices for clients remaining flat in the third quarter compared to the second quarter, Vale Chief Executive Murilo Ferreira said on Monday.

"The price will remain practically unchanged for the third quarter," Ferreira said at a press conference.

Under the quarterly iron-pricing system the company created last year, prices for a given quarter are based on an average of spot market prices during the three previous months.

Ferreira said credit tightening in China, Vale's largest customer and also the world's largest iron ore consumer, is unlikely to slow the Asian giant's economic growth.

"I don't believe in a slowdown in China, but rather a movement in the economic cycle. I expect a strong second semester for China," he said.

Spot market prices for iron ore remain close to all-time highs, helping Vale and other iron-ore miners post record profits.

Spot market ore with a 62% iron content cost $173 a tonne on May 25, about 9 percent less than its record high in February, but nearly triple the price two years ago.

Analysts say strong Chinese demand and a slow start-up for new projects will provide solid fundamentals for iron down the road.‹