The mining and metals market continues to change, reflecting the same sort of expanding demand (coupled with less robust supply increases) hitting the world of crude oil pricing.

Late last week, for instance, BHP Billiton (NYSE:BHP) reached a new iron ore pricing agreement with China's Baosteel. The agreement, which calls for a 79.9% increase in the levy for fine iron ore and a 96.5% jump in the tab for lump iron ore, is precisely the level agreed to a couple of weeks ago by London-based Rio Tinto (NYSE:RTP) and Baosteel, the largest Chinese steel manufacturer. Iron ore is a key ingredient in the manufacture of steel.

The prices agreed to by BHP and Rio Tinto reflect rapidly increasing demand for steel, along with slower increases in ore production. They also exceed the level agreed to by Brazil's Vale (NYSE:RIO), the third member of the world's largest iron ore-producing triumvirate. The Vale differential relates to a "freight premium," reflecting the greater distance between South America and China.

Vale is in the midst of a road show that it hopes will yield about $15 billion.The offering is intended to strengthen the company's balance sheet, possibly in preparation for a major acquisition. Copper, molybdenum, and gold producer Freeport-McMoRan (NYSE:FCX) and Pittsburgh-based aluminum producer Alcoa (NYSE:AA) have been rumored as possible targets for the company.

So stay tuned, Fools. The mining sector is hardly lacking in acquisition-related intrigue. At the same time, basic supply/demand considerations should ensure a spot for the major mining players on Foolish investment watch lists.

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