This would have positive ramifications for near term junior iron ore producers where future output is not contracted.
BHP will be paid about $US120.08 ($129.57) a tonne by most of its Asian customers for iron ore fines in the April to June quarter, a Macquarie commodities report said yesterday citing Japanese steel industry sources.
"(This) represents a massive 99.7 per cent rise over 2009 Japanese financial year contracts," the report said.
The price paid for iron ore lump will be 88 per cent above last year's levels at $US135 a tonne, it said.
BHP, the world's third biggest producer of the steel ingredient behind Brazil's Vale and Rio Tinto, last month revealed its groundbreaking win in striking quarterly contracts with a "significant number" of its Asian customers.
It did not disclose the price involved, but analysts had suggested it would gain almost 100 per cent on last year's benchmark.
BHP declined to comment on the Macquarie report yesterday.
Rio has yet to make a formal announcement about iron ore prices, but it has reportedly also suggested the move to quarterly contracts.
Steel prices could jump 23 per cent by the first half of the next financial year as steel mills pass on higher raw material costs, a Royal Bank of Scotland report said yesterday.
Disclosure: The author holds no positions in the company