When you can simultaneously lock in a 70%-plus price increase and boost your production volumes by nearly double-digit amounts, your whole year can seem like Carnaval. And investors in Brazil's CVRD (NYSE:RIO) certainly have reason to celebrate, with this major iron ore producer's stock having climbed about 30% in the past year and having paid nice dividends along the way.

The fourth quarter, then, was a fitting capper to this year. Total net revenue rose 55%; adjusted earnings before interest, taxes, depreciation, and amortization(EBITDA) climbed 78%; and earnings per American Depositary Share were up about 65%. Although those numbers didn't surpass the high end of estimates, they were above the mean expectation.

It wasn't completely a slam-dunk success, though. Costs of goods sold rose 51%, and EBITDA was pressured by some more modest production numbers, larger purchases of third-party iron ore, and higher overall costs in the production of iron ore and aluminum. And given that cost pressures don't look to be lightening up and copper production for next year seems a little on the low side, 2006 isn't looking to be quite such a wild party.

Of course, the big unknown at this point is the outcome of pricing negotiations with customers in Japan and China. Rumors are floating that China is looking to cap pricing at 2005 levels and looking to assert a little more influence in the process, rather than follow in the path the Japanese set, which is what the country has typically done. Of course, tough talk and posturing is part of negotiation, and I still believe that CVRD, Rio Tinto (NYSE:RTP), and BHP Billiton (NYSE:BHP) are going to secure double-digit price hikes.

Much as I like this company, I think it's worth remembering that we're probably closer to the end of this current upswing than to the beginning. Maybe prices will plateau at higher new levels, and maybe this whole commodity cycle will prove to have longer legs, but those are risky assumptions. After all, take a look at the drilling sector and what happens when the market suddenly and collectively decides that a secular upswing story is "over." So while the stock does look relatively inexpensive within its sector, I'd still be a little careful.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).