The discrepancy between global iron ore and steel prices could lead to a shorter-term pricing system than the quarterly adjustments currently used by Brazilian iron ore giant Vale, and multinationals BHP Billiton and Rio Tinto, according to executive director of global ferrous products at JP Morgan, Jeffrey Kabel. The quarterly backward-looking pricing mechanism creates a discrepancy between prices under contract and the spot market.
See http://www.bnamericas.com/news/metals/JP_Morgan_sees_iron_ore_pricing_moving_to_shorter-term_system/197333338.