According to Mr Chequer Bou Habib from Mineracao e Metalicos SA a Brazilian iron ore supplier that, iron ore price in Q4 might fall by 8% from that in Q3.
He said that current global iron ore supply has been by reference to prices in spot markets. The Big Three (CVRD, BHP Billiton and Rio Tinto) adopted floating prices in their iron ore dealings with main steel firms from June to August.
Mr Chequer said “Iron ore price in Q4 might edge down on the basis of Q3, yet higher than that in Q2. Short term contract price of iron ore in Q2 stayed in line with USD 112 per tonne while in Q3 the price stepped up to around USD 144 per tonne.”
Since this April the three ore titans have ditched a nearly 40 year old annual benchmark system of iron ore prices imposing a new market oriented quarterly mechanism on steel mills with iron ore prices in China spot markets as the main reference.