Brazilian mining giant Vale S.A. (VALE) said Wednesday that it had reached an agreement on 2009 iron ore price contracts with several Asian steelmakers.

Vale closed its first 2009 iron ore price contracts with South Korea's Posco (005490.SE) and Japanese steelmaker Nippon Steel Corp. (5401.TO), the miner said. The agreement also covers Japanese companies Nisshin Steel Co. (5407.TO), Kobe Steel Ltd. (5406.TO) and Sumitomo Metal Industries Ltd. (5405.TO).

Prices for iron ore fines will decline 28.2% from the 2008 reference price, with lump iron ore prices sliding 44.47%, Vale said. Iron pellet prices, much prized for their efficient use in blast furnaces, will decrease 48.3% from the 2008 contract price.

The fall in 2009 iron ore prices followed a steep drop-off in iron ore demand amid the global economic slowdown and financial crisis. Vale waited on the sidelines this year, opting to allow rivals BHP Billiton Ltd. (BHP) and Rio Tinto PLC (RTP) to set market prices in 2009.

Last year, Vale reached an early deal with Asian steelmakers, only to see those prices topped by ore from Australia when rival miners were able to wrangle a proximity premium.

Last year, Vale's iron ore fines from its Southern System mines rose 65%, while higher-quality ore from the massive Carajas mining complex increased by about 71%. Vale is the world's largest producer and exporter of iron ore and iron blast furnace pellets.

However, notable by its absence Wednesday was an agreement with Chinese steelmakers, who are again being led in price negotiations this year by Shanghai Baoshan Iron & Steel Co. (600019.SH), or Baosteel.

Chinese steelmakers have so far held out for a steeper price cut in 2009.

-By Jeff Fick, Dow Jones Newswires; 55-21-2586-6085; jeff.fick@dowjones.com