Brazilian miner Vale S.A. (VALE) sees signs Chinese steel companies are opting for iron ore term contract prices instead of the spot market, a Vale executive said Thursday.

"I think this will be the trend as spot prices increase," Jose Carlos Martins, director for ferrous minerals and metals at Vale S.A., said at a second quarter results conference call with analysts.

Martins earlier noted that Chinese spot prices reached $93.50 per metric ton yesterday.

Vale's benchmark prices rose 65% to 71% last year, depending on grades. The company said it was paid an average of $67.32 per ton in 2008.

Owing to the global economic crisis and consequent plummeting steel demand, Chinese mills have been attempting to secure a cut of around 40% in last year's benchmark contract price.

However, the big three ore producers, Vale, Rio Tinto (RTP) and BHP Billiton (BHP) have yet to settle with the Chinese mills.

The three miners have already closed 2009 term contract prices with steel mills in other Asian countries, Europe and the Americas with a discount of around 28%.

In order to exercise some control over the spot market, China is reported to be looking at a licensing system to limit access.

China is also reported to be wanting to put a ceiling on spot market prices, which would stimulate more domestic ore production.

Martins said Vale's position was to "wait and see".

"We've no idea what the outcome of Chinese discussions on this will be," he said. "China is becoming very important in iron ore and we would expect it would base more decisions on the market."

-By John Kolodziejski, Dow Jones Newswires; 55-21-2586-6086; John.Kolodziejski@dowjones.com