Chinese steel maker signs iron ore long-term contract with Venezuela's CVG

Economy
China's third-biggest steelmaker Wuhan Iron & Steel Group (Wisco) signed a long-term iron ore contract with Venezuela's state-run company Corporación Venezolana de Guayana (CVG), announced on Tuesday the official Chinese newspaper China Daily.

The agreement will help the mill to diversify its raw material sources and get it cheaper thanks to a different mechanism than the benchmark prices set yearly by global steel companies and the world's top three iron ore suppliers Anglo-Australian BHP Billiton, Río Tinto, and Brazil's Vale do Rio Doce.

"This is the first contract to be implemented with a separate pricing mechanism (from usual yearly agreements). This indicates that China's iron ore purchase prices need not be restricted by the world's top three suppliers," said the company through a statement posted on its website, Efe reported.

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