Asian steelmakers win discounts from Rio Tinto

After last week's 33% price fall for supply contracts with Japan's Nippon Steel, Rio Tinto confirmed that South Korean steel giant POSCO and Taiwanese steelmakers CSC and Dragon had agreed to the same terms.

The contract year began in April and the prices will take effect retrospectively.

The steelmakers will pay US$60 a tonne for the lower-grade Pilbara and Yandicoogina iron ore fines while the price for the higher grade Pilbara Blend lump varieties falls to US$72.

It remains unclear what effect the price agreement will have on the larger supply contracts with Chinese customers.

Rio Tinto Iron Ore chief Sam Walsh said the 2009 contract price negotiations had been tough but that the situation was "becoming clearer".

“We'll continue to negotiate with our remaining customers, the bulk of whom are in China," Mr Walsh said.

"We believe the settlements achieved to date  demonstrate that customers appreciate the certainty of price and volume that the benchmark system ensures.”

So far this year, Rio Tinto has sold about half of its iron ore on the spot market.