Brazilian miner Vale has raised the year to June 2009 iron ore contract price to Chinese customers by 20 pct, a company official said, noting that the hike was "in response to market demand."The official, who asked not to be identified, said that the additional charge for contract buyers was implemented on Sept 1.

    Trade publication Steel Business Briefing reported the price hike earlier today.

    The additional charge would appear to equalize the contract price Vale achieved for its ore with the higher price obtained by Australian suppliers.

    Rio Tinto and BHP Billiton, two suppliers with mines in Australia, claim a so-called "freight premium" to justify their higher prices, due to the shorter supply route to China.