Global mining giants led by Vale of Brazil, the world's biggest iron ore miner, are once again planning to raise iron ore prices by as much as 35 per cent to $145 a tonne for the next quarter as the current quarterly contract prices are well below the spot market price.

Vale and Anglo Australian mining giants Rio Tinto and BHP Billiton are said to be demanding a hike in iron ore prices for the coming July quarter after the 90 per cent-100 per cent increase in the newly formed quarterly contracts signed in April with Asian steel makers (See: BHP, Vale wrangle quarterly iron ore deal with Japan, Vale gets 90-per cent hike and  BHP Billiton almost doubles iron ore price for Asian steelmakers)

Adopting an aggressive stance this year, the Rio de Janeiro-based Vale with $28.6 billion in revenues last year and a net income of $5.8 billion, will raise the price of iron ore by 30-35 per cent, said the Brazilian newspaper O Estado de Sao Paulo yesterday, without revealing the source of its information..

But hiking the price for the next quarter has been anticipated by analysts since there had been no let up to the ore demand from China, the world's biggest consumer and importer of iron ore.

In late March 2010 Vale and BHP Billiton had made a breakthrough in trashing the old annual iron ore benchmark system by getting the Japanese steel mills to break ranks with China in their traditional joint negotiations, to agree to a quarterly system.

Vale, which earned 58 per cent of its 2009 revenues from sale of iron ore, today struck a deal with Japan's Nippon Steel and Sumitomo Metal Industries to sell iron ore at $100 to $110 a metric ton for the quarter commencing 1 April - a 90-per cent rate hike from the year earlier annual benchmark contract price.

Melbourne-based BHP Billiton had secured a 99.7-per cent price hike - 9.7 per cent more than Vale, which was approximately $131.50 per tonne, the landed price to Japan after taking freight charges into account, which was still 22-per cent below the then spot market price in early April.

The iron ore miners generally arrive at quarterly contract prices based on a three-month average of any of the three price indices- Platts, The Steel Index and Metal Bulletin Iron Ore Index for the period ending one month before the start of the new quarter.

Last year, the three miners had negotiated iron ore prices with Japanese and Korean steelmakers under the benchmark system at $60 a tonne, even when spot prices had been prevailing between $100 - $130 a tonne.

Since early April this year, spot iron prices had soared to $183.1 per tonne but have fallen by 18 per cent to about $142 a tonne as China started to curb imports of lesser grade iron ore, which was imported in large quantities by the hundreds of small steel mills in the country.

It will be interesting to see whether the Asian steel mills will agree to the new price hike, where the last quarter price hike is already hurting the Asian steel makers, who have passed on the hike to consumers, sending prices of automobiles, construction and others escalating.