The headquarters of Brazilian mining giant "Vale do Rio Doce" in Rio de Janeiro
© AFP/File Vanderlei Almeida

SHANGHAI (AFP) - The price rise will come into effect for the fiscal year starting April 1, 2007.

"The prices for 2007 reflect conditions in the global iron ore market and were reached unprecedentedly quickly," the Brazilian company said in a statement on its website.

The price increase is less than the 19-percent rise in 2006 and a 71.5 percent hike in 2005 but is within the seven to 10 percent range expected by industry analysts.

The price agreement is expected to serve as the benchmark for negotiations between global miners such as BHP Billiton and Rio Tinto and steelmakers in Japan, South Korea and other Chinese manufacturers.

It has usually been the case that the first price agreement reached with a major European or Asian steelmaker serves as the benchmark for the rest of the industry.

China's steelmakers, led by Baosteel, started early in their efforts to negotiate iron ore prices for next fiscal year, hoping for a different outcome from the large increases of the past two years.

CVRD, BHP Billiton and Rio Tinto account for about 70 percent of global iron ore export sales.

©AFP