Commodity giant Rio Tinto PLC agreed to cut its price for iron-ore fines by 33%, and lump ore by 44%, in a new benchmark contract with Japan’s largest steelmakers. Rio Tinto’s rival ore suppliers, BHP Billiton and Vale, are expected to push for higher settlements, but China’s steelmakers are seen demanding even lower prices in their upcoming negotiations.

China has the world’s largest steel industry, and is a leading importer of iron ore as it has little domestic capacity and an inadequate domestic scrap market.

The price of iron ore can be indicative of steel prices worldwide. However, North American producers import very little iron ore compared with Asian and European steelmakers.

Read more at http://metalproducing.com/frontpage/news/84317/rio_tinto_slashes_ironore_prices_in_new_contract