(Updates prices in second paragraph.)
Oct. 17 (Bloomberg) -- Vale SA, the world’s largest iron- ore producer, fell the most in three weeks on concern it is cutting prices for the steel-making material.
Vale dropped 6.1 percent to 38.66 reais at 2:44 p.m. Sao Paulo time, leading decliners. The benchmark Bovespa index slipped 2.5 percent. Shares have fallen 18 percent in the past year, compared to the Bovespa’s 25 percent drop.
O Estado de S. Paulo newspaper reported Oct. 15 that Vale is giving Chinese customers the option to pay for iron ore in the fourth quarter at close to the spot market price as miners cede to pressure from Chinese steelmakers unhappy with paying the higher prices set in quarterly contracts. It is the first day of trading after Vale shareholders got $3 billion in dividends on Oct. 14.
“The fourth quarter will be much more difficult than what was expected in terms of prices in China,” Marco Saravalle, an equity analyst at Coinvalores Corretora de Valores, said by phone from Sao Paulo. “There’s a formula. But there is no way to escape spot prices for very long.”
Vale’s press office declined to comment on the O Estado story in an e-mailed statement.
--Editors: Charles Siler, Dale Crofts
To contact the reporter on this story: Helder Marinho in Sao Paulo at firstname.lastname@example.org
To contact the editor responsible for this story: Jessica Brice at email@example.com