India Companies Support Iron Ore Quarterly Contracts
Indian companies such as Sesa Goa and NMDC like what they see with the change in iron ore contracts with Vale (NYSE:VALE), BHP Billiton (ASE:BHP) and Rio Tinto (ASE:RIO), from an annual to a quarterly basis, and so do investors, as shares in the companies rose with the news this is going to be the new way of doing business with iron ore contracts and pricing, reflecting a more accurate measure of the market than the annual pricing couldn't do.
Exporters like this because it decreases the difference in price between spot and contract prices, and allows them to participate in profits depending on the movement of prices.
Annual contracts interfered with that and forced companies to operate within the parameters of the agreed upon price, no matter how it impacted their margins and earnings.
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